Investing
Calculate your capital gains tax on stock sales for any country
What this calculator does
Capital gains tax is owed on profits from selling investments. Short-term capital gains apply to assets held one year or less and are taxed at ordinary income rates (10-37% federally, depending on income bracket). Long-term capital gains apply to assets held over one year and receive preferential rates (0%, 15%, or 20% federally). Long-term gains are significantly more tax-efficient, often saving thousands in taxes on the same profit. Understanding the difference between short and long-term treatment is critical for investment strategy. Additionally, net investment income tax (3.8%) applies to high-income earners, and many states impose additional capital gains taxes.
How it works
Capital gain is calculated as selling price minus the cost basis (original purchase price plus commissions/fees). If you held the investment one year or less, it's a short-term gain taxed at your marginal income tax rate. If held over one year, it's a long-term gain eligible for preferential rates. You report gains on Schedule D and pay federal income tax at year-end. Long-term rates are 0% (for lowest earners), 15% (for middle earners), or 20% (for high earners). State taxes vary; some have no capital gains tax, while others tax all gains as income.
Formula
Capital Gain = Sale Price - Cost Basis. Short-term Tax = Capital Gain × Marginal Income Tax Rate. Long-term Tax = Capital Gain × Long-term Capital Gains Rate (0%, 15%, or 20%). Total Tax = Federal Tax + State Tax + 3.8% Net Investment Income Tax (if applicable).
Tips for using this calculator
- Hold investments over one year if possible—long-term rates typically save 15-37% in taxes versus short-term rates
- Use tax-loss harvesting to offset gains; selling losses can reduce taxable gains dollar-for-dollar
- Be aware of the wash-sale rule: buying similar securities within 30 days of a loss prevents deducting it
- Track your cost basis carefully; using specific identification method can minimize taxes on partial sales
- Consult a tax professional for complex situations like inherited stocks (step-up basis) or covered calls
Frequently asked questions
What's the difference between short-term and long-term capital gains tax rates?
Short-term gains (held ≤1 year) are taxed at ordinary income rates: 10%, 12%, 22%, 24%, 32%, 35%, or 37% federally depending on your income bracket. Long-term gains (held >1 year) receive preferential rates: 0% for low earners, 15% for middle earners, or 20% for high earners. This difference can save you thousands on the same profit—for example, a $10,000 gain taxed at 37% (short-term) costs $3,700, versus $2,000 at 20% (long-term).
How does the wash-sale rule affect my tax-loss harvesting strategy?
The wash-sale rule prohibits deducting a loss if you buy the same or substantially identical security within 30 days before or after the sale. To harvest losses tax-efficiently, you must avoid repurchasing the same security for at least 30 days. You can switch to a similar but not substantially identical security (e.g., different index fund or sector) to maintain market exposure while deducting the loss.
What's the net investment income tax and when do I owe it?
The net investment income tax (NIIT) is an additional 3.8% tax on investment income for high earners. It applies to capital gains, dividends, and other investment income for single filers with modified adjusted gross income over $200,000 ($250,000 if married filing jointly). If you're in this bracket, your long-term capital gains are effectively taxed at 23.8% federally (20% + 3.8%), not just 20%.
