What Are the Capital Gains Tax Rates for 2026?

Ordinary brackets are covered in 2026 federal tax brackets. Loss harvesting rules live in tax-loss harvesting.

This is education, not tax advice.

2026 long-term capital gains rate thresholds#

Taxable-income thresholds for the maximum 0% and 15% long-term capital gains rates (Rev. Proc. 2025-32):

Read the IRS table carefully: these are taxable income stacks that interact with your other income. A large gain can push later dollars into a higher capital-gains layer.

Short-term vs long-term#

Collectibles and certain other assets can face different maximum rates. Qualified dividends generally follow the long-term schedule when they meet IRS tests.

Net Investment Income Tax (NIIT)#

Higher-income households may also owe the 3.8% Net Investment Income Tax on investment income above IRS thresholds. NIIT is in addition to the 0/15/20 capital gains rates—not a replacement. See IRS Topic guidance on NIIT for current thresholds.

What this means for everyday investors#

• Prefer long-term holding periods in taxable accounts when the economics already make sense
• Use tax-advantaged accounts (401(k), IRA) when the goal is retirement compounding
• Do not sell only to “get the 0% rate” without modeling the rest of the return

Hypothetical: how a gain stacks with other income#

This is not your tax return—only a way to see why “taxable income” drives the capital-gains rate.

Assumptions: Single filer, 2026, simplified; ignores deductions, state tax, NIIT, and AMT; long-term gain only.

Suppose you have $40,000 of taxable ordinary income after the standard deduction (wages and interest, for example). You sell shares held more than a year with a $15,000 long-term capital gain. Your taxable income for rate purposes now includes that gain in the stack IRS tables describe.

Because the 0% long-term rate for single filers in 2026 applies up to $49,450 of taxable income (per Rev. Proc. 2025-32), part of your gain might fall in the 0% layer and part might spill into 15%—depending how the IRS ordering rules apply on your actual return. If your ordinary income were already $55,000 before the gain, more of the gain would likely face 15% (and potentially 20% at very high taxable incomes).

The lesson: you cannot read the 0% threshold as “I make under $49k so all my gains are free.” Gains sit on top of other taxable income. Tax software or a preparer runs the official worksheet; blog math stays directional.

Short-term gains skip this schedule entirely—they generally ride ordinary 2026 brackets. A trader flipping positions under a year pays wage-like rates even when long-term investors pay 0/15/20.

Holding-period and recordkeeping pitfalls#

The difference between short-term and long-term treatment is often one day of calendar holding. Common mistakes:

• Selling the day before a one-year anniversary because you needed cash urgently—expensive if the gain is large.
• Forgetting reinvested dividends when computing basis—they raise basis when tracked, but many people guess.
• Wash sales in taxable accounts when you harvest losses then rebuy too quickly—see tax-loss harvesting for process, not timing games.
• Assuming ETF shares are all long-term when you bought lots at different dates—brokers often sell “FIFO” unless you elect specific identification.
• Ignoring state capital gains rules—some states tax gains as ordinary income; this article is federal-focused.

Keep Form 1099-B, purchase confirmations, and corporate action notices. If you inherited assets, basis rules differ from what you paid. If you received stock from an employer, ISO/NSO/RSU rules may override simple “long-term” language.

Where to hold what: a simple account map#

Use this process checklist when deciding whether a sale even triggers capital-gains math:

In taxable accounts, asset location is boring but real: holding broad index funds long term while keeping cash needs elsewhere reduces unnecessary 1099-B events. In retirement accounts, contribution limits, not capital-gains rates, usually bind first.

If you are near the 0%/15% border, ** bunching** charitable gifts or deferring bonus income might change the layer—but only if the rest of your return supports it. Do not let tax tail wag investment dog.

Sources#

• IRS, Revenue Procedure 2025-32 (long-term capital gains taxable-income thresholds).
• IRS, Tax Topic 409 — Capital Gains and Losses.
• IRS, federal income tax rates and brackets.