The 15% capital gains tax rate applies to long-term gains when your 2026 taxable income falls between $49,450 and $545,500 as a single filer, or between $98,900 and $613,700 as a married couple filing jointly. Head of household filers hit the 15% band from $66,200 to $579,600. Below those floors, the rate on long-term gains is 0%. Above the ceilings, it climbs to 20%. The rate only applies to assets you held for more than a year before selling.
2026 Income Thresholds by Filing Status
The IRS adjusts these figures every year for inflation. For the 2026 tax year:1Internal Revenue Service. Rev. Proc. 2025-32
- Single filers pay 0% up to $49,450 in taxable income, 15% from $49,450 to $545,500, and 20% above $545,500.
- Married filing jointly: 0% up to $98,900, 15% from $98,900 to $613,700, and 20% above $613,700.
- Head of household: 0% up to $66,200, 15% from $66,200 to $579,600, and 20% above $579,600.
- Married filing separately: 0% up to $49,450, 15% up to $306,850, and 20% above that.1Internal Revenue Service. Rev. Proc. 2025-32
These are taxable income figures, meaning they apply after you subtract the standard deduction or your itemized deductions. A single filer in 2026 gets at least a $16,100 standard deduction before the brackets even engage.
How the Gain Stacks on Top of Your Other Income
Your long-term capital gain isn’t taxed in isolation. The IRS stacks it on top of your ordinary income (wages, interest, self-employment earnings), and the rate depends on where each layer of gain lands in the bracket system.
Consider a single filer with $60,000 in wages. After the $16,100 standard deduction, taxable ordinary income is about $43,900. Add a $15,000 long-term capital gain. The first $5,550 of the gain fills the remaining space up to the $49,450 threshold and is taxed at 0%. The other $9,450 sits in the 15% band. One sale, two rates. Tax software handles the math automatically, but the mechanics explain why realizing gains in a low-income year can be dramatically cheaper than doing it in a high-income year.
If your total income lands near the top of the 15% band, the same split can happen at the 20% boundary, with part of a large gain taxed at 15% and the rest at 20%.
You Have to Hold the Asset More Than One Year
The 0%, 15%, and 20% rates only apply to long-term gains, meaning you held the asset for more than one year before selling.2Office of the Law Revision Counsel. 26 U.S.C. 1222 – Other Terms Relating to Capital Gains and Losses Anything sold at or before the one-year mark is short-term, and short-term gains are taxed as ordinary income at rates up to 37%.
The holding period begins the day after you acquire the asset and ends on the date you sell. Buy on March 1, 2025 and you need to sell on or after March 2, 2026 to qualify. Missing by one day pushes the entire gain into ordinary rates, and there is no exception.
Inherited property is treated as long-term automatically, no matter how briefly you actually hold it before selling.
Assets That Don’t Get the 15% Rate
Most investment property fits the 0%/15%/20% framework: stocks, ETFs, mutual fund shares, bonds, and real estate held for investment.3Internal Revenue Service. Topic No. 409, Capital Gains and Losses Two categories are carved out and taxed higher.
Collectibles (artwork, antiques, coins, precious metals) are capped at a 28% maximum rate even if your income would otherwise place you in the 15% bracket.3Internal Revenue Service. Topic No. 409, Capital Gains and Losses Depreciation recapture on real estate, known as unrecaptured Section 1250 gain, is taxed at a maximum 25% rate. Rental property owners who’ve taken years of depreciation deductions often don’t realize that portion of their eventual gain won’t get the 15% rate.
A separate rule, not a rate, matters if you’re selling a home: up to $250,000 of gain on a primary residence ($500,000 for married filing jointly) can be excluded from tax entirely if you owned and lived in the home for at least two of the last five years.4Office of the Law Revision Counsel. 26 U.S.C. 121 – Exclusion of Gain From Sale of Principal Residence Any gain above the exclusion is taxed at whatever capital gains rate applies to your income.
The 3.8% Surtax That Pushes 15% to 18.8%
Higher earners owe an additional 3.8% Net Investment Income Tax on top of the regular capital gains rate. The surtax kicks in when modified adjusted gross income exceeds $200,000 for single filers, $250,000 for married filing jointly, or $125,000 for married filing separately.5Office of the Law Revision Counsel. 26 U.S.C. 1411 – Imposition of TaxQuestions and Answers on the Net Investment Income Tax
The 3.8% applies to the lesser of your net investment income or the amount your income exceeds the threshold. For a taxpayer in the 15% capital gains bracket who also crosses the NIIT line, the effective rate on long-term gains is 18.8%. These thresholds are not indexed for inflation, so more people cross them each year. The surtax is reported on Form 8960.
Losses Reduce the Gain Before the Rate Applies
Capital losses offset capital gains dollar-for-dollar within the same year. A $20,000 long-term gain paired with a $12,000 long-term loss leaves $8,000 subject to the 15% rate (or whatever rate your income triggers). Short-term losses offset short-term gains first, long-term losses offset long-term gains first, and any leftover crosses over.
If total losses exceed total gains, you can deduct up to $3,000 of the net loss against ordinary income ($1,500 if married filing separately).6Office of the Law Revision Counsel. 26 U.S.C. 1211 – Limitation on Capital Losses Anything above that carries forward indefinitely.
One trap: the wash sale rule disallows a loss deduction if you buy a substantially identical security within 30 days before or 30 days after the sale.7Office of the Law Revision Counsel. 26 U.S.C. 1091 – Loss From Wash Sales of Stock or Securities That’s a 61-day window around the sale. The disallowed loss usually gets added to the basis of the replacement shares, but if the repurchase happens inside an IRA, the loss is effectively lost for good.
Reporting the Sale and Proving Your Basis
Brokerages report covered securities on Form 1099-B, including acquisition date, cost basis, and proceeds.8Internal Revenue Service. Instructions for Form 1099-B You transfer the details to Form 8949, splitting short-term from long-term transactions, and the totals flow to Schedule D on your Form 1040.9Internal Revenue Service. Instructions for Form 8949
For assets the brokerage doesn’t track (real estate, older cryptocurrency, private company stock, inherited property), you’re responsible for documenting basis and holding period. If you can’t prove your basis, the IRS can treat it as zero, meaning the whole sale price becomes taxable gain. Hold onto purchase confirmations, closing statements, and any inheritance appraisals.