What is the difference between short-term and long-term capital gains?

Assets held one year or less generate short-term gains taxed at ordinary income rates (10%-37%); assets held longer than a year get the preferential long-term rates (0%/15%/20%). Holding an extra day past the one-year mark can cut the tax bill dramatically.

Capital Gains Tax Calculator

Q: What are the 2025 long-term capital gains rates?

0% for taxable income up to $48,350 (single) / $96,700 (married filing jointly); 15% up to $533,400 / $600,050; 20% above. Gains stack on top of ordinary income to determine which rate applies.

Q: How can I reduce capital gains tax?

Hold past one year for long-term rates, harvest losses to offset gains (plus up to $3,000 of ordinary income per year), realize gains in low-income years to use the 0% bracket, use tax-advantaged accounts, and remember the home-sale exclusion of $250,000/$500,000 for primary residences.

Selling stock, crypto, or property? Estimate the federal tax — with gains stacked on your other income the way the IRS actually does it.

Estimated federal tax on this gain

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Capital gain

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Effective rate on gain

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You keep

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If held long-term instead

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How capital gains are taxed

Long-term gains (held >1 year) use preferential brackets; short-term gains are just ordinary income. Either way, the gain stacks on top of your other taxable income — your other income fills the lower brackets first, and the gain is taxed in whatever bracket space remains.

2025 long-term capital gains brackets (taxable income)

Rate	Single	Married filing jointly
0%	$0 – $48,350	$0 – $96,700
15%	to $533,400	to $600,050
20%	above	above

Worked example

Bought stock for $20,000, sold for $35,000 after 2 years · single · $65,000 other taxable income:

Gain: $15,000, stacked from $65,000 to $80,000 — entirely inside the 15% long-term bracket → tax ≈ $2,250.

Sold at 11 months instead? The same gain lands in the 22% ordinary bracket → ≈ $3,300. One more month of holding saves $1,050.

Legal ways to shrink the bill

Hold past one year — the single biggest lever, as the example shows. Harvest losses: realized losses offset gains dollar-for-dollar, plus $3,000/yr against ordinary income (mind the 30-day wash-sale rule). Use the 0% bracket: in low-income years — early retirement, sabbaticals — singles can realize gains up to $48,350 of total taxable income federally tax-free. Location matters: gains inside a Roth IRA or 401(k) aren't taxed on sale at all. Home sellers: $250k/$500k of primary-residence gain is excluded if you lived there 2 of the last 5 years. High earners: a 3.8% net investment income tax applies above $200k/$250k MAGI, not modeled here. Compute the underlying return first with the ROI calculator.

Frequently asked questions

What are the 2025 long-term capital gains rates?

0% to $48,350 single / $96,700 MFJ; 15% to $533,400 / $600,050; 20% above — stacked on other income.

Short-term vs. long-term gains?

≤1 year = ordinary rates (10–37%); >1 year = 0/15/20%. A single extra day of holding can matter a lot.

How can I reduce capital gains tax?

Hold long-term, harvest losses, use the 0% bracket in low-income years, shelter in retirement accounts, use the home-sale exclusion.

Related calculators

Note: Federal tax only, 2025 brackets; excludes the 3.8% NIIT, state taxes, depreciation recapture, and collectibles rates. Not tax advice. Brackets: 2025 tax year. Last reviewed: July 2026.