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

Assets held for one year or less are classified as short-term capital gains and taxed as ordinary income at standard federal rates ranging from 10% to 37%. Assets held for longer than one year qualify for preferential long-term capital gains tax rates of 0%, 15%, or 20%, depending on your overall taxable income.

What is the Net Investment Income Tax (NIIT)?

The Net Investment Income Tax (NIIT) is a 3.8% surtax imposed under Section 1411 of the Internal Revenue Code. It applies to investment income (including capital gains, dividends, and rental income) for individuals with Modified Adjusted Gross Income exceeding $200,000 for single filers or $250,000 for married couples filing jointly.

How does the Section 121 home sale tax exemption work?

Under Section 121 of the Internal Revenue Code, you can exclude up to $250,000 of capital gain ($500,000 for married couples filing jointly) from the sale of your primary residence, provided you owned and lived in the property as your primary home for at least 2 of the 5 years preceding the sale.

Which US states do not tax capital gains?

States with no state individual income tax do not tax capital gains: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. New Hampshire taxes dividend and interest income but not capital gains. Washington State levies a 7% tax strictly on long-term capital gains exceeding $262,000.

Can capital losses offset capital gains?

Yes. You can use capital losses from losing stock or crypto trades to offset capital gains dollar-for-dollar. If your total net capital losses exceed your capital gains, you can deduct up to $3,000 of excess net loss against ordinary income each year, carrying forward any remaining losses indefinitely into future tax years.

Is my capital gains tax calculation private?

Yes. FreeCalcSuite executes 100% locally in your device's browser memory (RAM). Zero sale prices, asset numbers, or taxable gain amounts are ever transmitted to any remote server or third party.

Federal 0/15/20% • 3.8% NIIT Surtax • 50 States

US Capital Gains Tax & Net Profit Calculator

Estimate federal, state, and Net Investment Income Tax (NIIT) on stock, cryptocurrency, and real estate sales, including Section 121 home exclusions.

📊 Asset Sale Transaction

2025/2026 BRACKETS

Asset Category

Cost Basis (Buy)

Sale Proceeds (Sell)

Holding Period

Filing Status

Other Taxable Income

State of Residence

Total Tax Owed

$12,150

Fed + State + NIIT

Net Kept Proceeds

$62,850

After all taxes

Taxable Capital Gain

$50,000

Net Profit

Effective Tax Rate

24.3%

Of net profit

Transaction Breakdown LONG-TERM RATES

Selling for $75,000 on a $25,000 cost basis generates $50,000 in capital gain, incurring an estimated $12,150 in combined taxes.

Cost Basis: $25,000 Taxes: $12,150 Net Profit Kept: $37,850

Itemized Capital Gains Tax Breakdown Federal & State Jurisdictions

Federal Capital Gains Tax (15%)	$7,500
Net Investment Income Tax (NIIT 3.8%)	$0
State Capital Gains Tax (9.3%)	$4,650
Total Estimated Tax Liability	$12,150

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How US Capital Gains Tax Works (2025/2026 Rules)

Whenever you sell a capital asset—such as shares of stock, cryptocurrency, mutual funds, or real estate—for more than you paid for it, the profit is classified as a capital gain. In the United States, how that profit is taxed depends strictly on **how long you held the asset** and your total taxable income.

1. Short-Term vs. Long-Term Capital Gains

The most fundamental distinction in the IRS tax code is the one-year holding period:

Short-Term (≤ 365 Days): Taxed as ordinary income at your top federal bracket (10%, 12%, 22%, 24%, 32%, 35%, or 37%). Active day trading and short-term flipping carry severe tax drag.
Long-Term (> 365 Days): Qualifies for preferential rates: 0% (up to \$47,025 Single / \$94,050 Married Joint), 15% (up to \$518,900 Single / \$583,750 Joint), and 20% on gains above that threshold.

2. The 3.8% Net Investment Income Tax (NIIT)

High earners are subject to an additional 3.8% Net Investment Income Tax enacted under the Affordable Care Act. This surtax applies to the lesser of your net investment gains or the amount by which your Modified Adjusted Gross Income (MAGI) exceeds **\$200,000 for single filers** or **\$250,000 for married couples filing jointly**. When combined with the 20% top long-term rate, the top effective federal capital gains rate is 23.8%.

Frequently Asked Questions About Capital Gains

How does the Section 121 primary home sale exclusion work? ▼

Under Section 121, if you owned and lived in your home as your primary residence for at least 24 months out of the 5 years prior to the sale date, the first \$250,000 of profit (for single filers) or \$500,000 (for married couples filing jointly) is completely tax-free. You only pay capital gains taxes on profit exceeding those exclusion limits.

How is cryptocurrency taxed by the IRS? ▼

Under IRS Notice 2014-21, cryptocurrency and digital assets are classified as property, not currency. Selling crypto for US dollars, trading one cryptocurrency for another (e.g. BTC to ETH), or purchasing goods with crypto triggers a taxable capital gains event that must be reported on IRS Form 8949 and Schedule D.

What is Tax-Loss Harvesting? ▼

Tax-loss harvesting involves selling losing investments before the end of the calendar year to offset realized capital gains dollar-for-dollar. If your capital losses exceed your gains, you can write off up to \$3,000 against ordinary income, and carry forward any remaining unused losses into future tax years.

What is the IRS Wash-Sale Rule? ▼

Under the wash-sale rule, if you sell a security at a loss and buy the same or a 'substantially identical' security within 30 days before or after the sale, you cannot claim the tax loss. Instead, the disallowed loss is added to the cost basis of the newly purchased shares.

Do I have to pay estimated quarterly taxes on large capital gains? ▼

Yes. The US tax system is pay-as-you-go. If you realize a substantial capital gain (such as selling a business, large stock position, or real estate), waiting until April 15 can trigger IRS underpayment penalties. You may need to make an estimated quarterly tax payment (Form 1040-ES) in the quarter the asset was sold unless you qualify for safe harbor rules.

Are any of my financial numbers saved on a server? ▼

No. FreeCalcSuite operates with a 100% private, client-side in-memory architecture. Zero transaction prices, cost basis values, profits, or tax calculations are ever uploaded, tracked, or stored on remote servers.