What Are the Capital Gains Tax Rates for 2026? The 0%, 15% and 20% Brackets Explained

For tax year 2026, a gain on an asset you held more than one year is taxed at 0%, 15% or 20%, depending on your taxable income. A single filer pays 0% up to $49,450 of taxable income and 15% up to $545,500. Gains on assets held one year or less are taxed like ordinary income.

What are the 2026 long-term brackets?

The IRS sets two dollar limits for each filing status. Taxable income up to the first limit is taxed at 0% on the gain, income above it up to the second limit at 15%, and income above the second limit at 20%.

These are limits on total taxable income, which means your wages and other income count first, and the gain stacks on top. Part of one gain can land in two brackets.

How are short-term gains taxed?

If you sold something you held for a year or less, the profit is added to your other income and taxed at your ordinary rate. That is why the holding period matters. Selling a few days after the one-year mark can change the rate on the whole gain.

Which gains have a higher maximum rate?

IRS Topic 409 lists two groups that are not on the 0, 15 and 20 scale. Gain on collectibles, such as coins or art, has a 28% maximum rate, and so does the taxable part of gain on certain qualified small business stock. Unrecaptured section 1250 gain, which comes mostly from depreciation claimed on real estate, has a 25% maximum rate. Topic 409 is written for tax year 2025, so check the current instructions when you file.

When does the 3.8% tax apply?

The net investment income tax adds 3.8% on the lesser of your net investment income or the amount by which your modified adjusted gross income passes a threshold. The IRS lists the thresholds as $250,000 for married filing jointly, $125,000 for married filing separately and $200,000 for single and head of household filers. You figure it on Form 8960. Our net investment income tax guide walks through it.

Example

This example uses invented numbers. Dana files as single in 2026 with $30,000 of taxable income before a $30,000 long-term gain from selling shares. The 0% bracket ends at $49,450, so $19,450 of the gain is taxed at 0%. The other $10,550 is taxed at 15%, which is $1,582.50. Dana's tax on the gain is therefore $1,582.50, not 15% of the whole $30,000.

What about losses?

Capital losses first offset capital gains. If losses are larger, up to $3,000 ($1,500 if married filing separately) can reduce other income in a year, and the rest carries forward. Report sales on Form 8949 and carry the totals to Schedule D (Form 1040).

What about Illinois?

The IDOR lists the Illinois individual income tax rate at 4.95%. The Illinois return starts from federal adjusted gross income, so a gain on your federal return generally flows into it too. Our Illinois guide explains the state side.

Common mistakes

• Assuming the rate is set by the gain alone. Your other income decides where the gain lands.
• Miscounting the holding period. Count from the day after you acquire the asset to the day you sell.
• Forgetting the 3.8% tax when income is high.
• Ignoring broker forms. Brokers report sales to you and the IRS, and Form 8949 reconciles them.

What to do next

Estimate your 2026 taxable income before you sell, and check where it falls against the table. If a sale is near a bracket line or near the one-year mark, ask a CPA before you sell. Sales already made may also change your estimated payments.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.