For the 2026 tax year, federal capital gains tax brackets split into two systems. Long-term gains, from assets held more than a year, are taxed at 0%, 15%, or 20% depending on your taxable income. Short-term gains, from assets held a year or less, are taxed at your ordinary income rate of 10% to 37%.1Internal Revenue Service. Topic no. 409, Capital Gains and Losses Higher earners can also owe an additional 3.8% surtax on investment income.
2026 Long-Term Capital Gains Brackets
The IRS adjusts the income thresholds for long-term gains each year for inflation.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 For 2026, the tiers are:
0% Rate
You owe nothing on long-term gains if your total taxable income stays at or below:
- Single: $49,450
- Married filing jointly: $98,900
- Head of household: $66,200
- Married filing separately: $49,450
15% Rate
The 15% rate applies to taxable income above the 0% ceiling and up to:
- Single: $545,500
- Married filing jointly: $613,700
- Head of household: $579,600
- Married filing separately: $306,850
20% Rate
The top rate kicks in once taxable income passes those 15% ceilings:
- Single: above $545,500
- Married filing jointly: above $613,700
- Head of household: above $579,600
- Married filing separately: above $306,850
Even at the top, 20% is well under the 37% ordinary rate that applies to the same income if it were wages.
Short-Term Gains Follow Ordinary Rates
There is no preferential rate for gains on assets held a year or less. The profit gets added to your wages, interest, and other income and taxed at your regular bracket.1Internal Revenue Service. Topic no. 409, Capital Gains and Losses For 2026, ordinary rates run from 10% on the first $12,400 of taxable income for a single filer up to 37% on income above $640,601.3Internal Revenue Service. Federal Income Tax Rates and Brackets Holding an asset a few months longer to cross the one-year line can cut the rate on the same profit roughly in half.
How Gains Stack on Top of Your Other Income
The capital gains thresholds are based on total taxable income, not just investment income. The IRS uses a stacking method: your ordinary income fills the brackets first, and long-term gains sit on top.4Office of the Law Revision Counsel. 26 U.S. Code 1 – Tax Imposed
That means a single gain can straddle two rate tiers. Take a single filer with $40,000 of ordinary taxable income and $20,000 of long-term gains. The first $9,450 of gain fills the space up to the $49,450 zero-bracket ceiling and is taxed at 0%. The remaining $10,550 is taxed at 15%. If the same filer had $60,000 of ordinary income instead, the ordinary income would already have used up the 0% space, and the full $20,000 gain would fall in the 15% bracket.
The 3.8% Net Investment Income Tax
Above the standard rates, some taxpayers owe an extra 3.8% Net Investment Income Tax. It applies to the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds a fixed threshold.5Internal Revenue Service. Net Investment Income Tax The thresholds:
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
These figures are not indexed for inflation and have stayed at the same amounts since the tax took effect in 2013.6Internal Revenue Service. Questions and Answers on the Net Investment Income Tax For a high-income single filer in 2026, the combined rate on long-term gains can reach 23.8% (20% plus 3.8%), and short-term gains can be taxed at a combined effective rate as high as 40.8%.
Assets That Don’t Use the 0/15/20 Schedule
Two categories of long-term gains fall outside the standard rate tiers.
Collectibles
Long-term gains from selling collectibles, including coins, art, stamps, antiques, and precious metals, are taxed at a maximum rate of 28%.1Internal Revenue Service. Topic no. 409, Capital Gains and Losses If your ordinary rate is below 28%, you pay at that lower rate instead. A collector otherwise in the 32% or 37% ordinary bracket pays 28% on gains from a coin or art sale rather than the 20% that would apply to stock.
Depreciation Recapture on Real Estate
When you sell rental property or other depreciable real estate, the portion of the gain attributable to depreciation you previously deducted is taxed at a maximum rate of 25%. This is called unrecaptured Section 1250 gain.4Office of the Law Revision Counsel. 26 U.S. Code 1 – Tax Imposed Any gain above the depreciation amount is taxed at the regular long-term rate.
Selling Your Home
The sale of a primary residence has its own carve-out. Single filers can exclude up to $250,000 of gain from tax, and married couples filing jointly can exclude up to $500,000.7Internal Revenue Service. Topic no. 701, Sale of Your Home Gain above those amounts is taxed at the applicable long-term rate.
To qualify, you must pass two tests within the five-year period ending on the date of sale: you must have owned the home for at least two years, and you must have used it as your primary residence for at least two years.8Internal Revenue Service. Sale of Residence – Real Estate Tax Tips The ownership years and the use years don’t have to be the same two years or run consecutively.
Offsetting Gains with Losses
Capital losses reduce the amount of gain subject to tax and can change which bracket applies to what’s left. The IRS requires netting within each holding period first: short-term losses offset short-term gains, and long-term losses offset long-term gains. If one category still shows a net loss after that step, it crosses over to reduce gains in the other category.1Internal Revenue Service. Topic no. 409, Capital Gains and Losses
If your total capital losses for the year exceed your total gains, you can deduct up to $3,000 of the excess against ordinary income (or $1,500 if married filing separately). Any loss beyond that annual cap carries forward to future tax years indefinitely, keeping its character as short-term or long-term.1Internal Revenue Service. Topic no. 409, Capital Gains and Losses A long-term loss carried into next year can offset long-term gains that would otherwise be taxed at 15% or 20%.