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Capital Gains Tax Calculator
Estimate capital gains tax on your investment profits.
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Your Profit Isn't Yours Until the IRS Gets Its Cut
You bought a stock for $10,000 and sold it for $20,000. Sweet $10k profit, right? Wrong. If you held it less than a year, you might owe $3,700 in taxes (37% bracket). But if you waited just one more day past the 1-year mark? You'd owe only $2,000 (20% long-term rate). That's a $1,700 difference for waiting 24 hours.
This calculator shows you exactly how much you'll owe—before you hit the sell button.
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💡 Expert Tip: The 366-Day Rule
Wait 366 days. Not 365. Why? Because the IRS counts the day you buy but not the day you sell. If you bought on January 1st, 2024, and sell on January 1st, 2025, that's only 365 days—still short-term. You need to sell on January 2nd, 2025, or later.
One extra day can cut your tax bill in half (or more).
David Chen, CFA: "I've seen people panic sell during a dip at 11 months. If you can afford to wait 30 more days, do it. The tax savings often beat timing the market."
⚠️ Common Mistake: The "Reinvestment" Myth
"If I reinvest the money, I don't pay taxes, right?"
Wrong. This is the #1 misconception. You owe capital gains tax the moment you sell—regardless of what you do with the money. Whether you buy another stock, pay off debt, or stuff it under your mattress, the IRS wants its cut.
Exception: 1031 exchanges (real estate only) and Qualified Opportunity Zone investments. For stocks? No exceptions.
📐 Short-Term vs Long-Term: The Math
Short-Term Capital Gains (held ≤ 1 year):
Long-Term Capital Gains (held > 1 year):
15%: Up to ~$518,000 (single) / $584,000 (married)
20%: Above those thresholds
Note: High earners may also pay a 3.8% Net Investment Income Tax on top of the 20% rate.
🎯 Real-World Example
You bought $50,000 of Tesla stock. One year later it's worth $80,000 ($30k gain).
- Sell at 11 months (short-term, 32% bracket): Tax = $9,600. You keep $20,400.
- Sell at 13 months (long-term, 15% rate): Tax = $4,500. You keep $25,500.
- Difference: $5,100 saved by waiting 2 extra months.
💰 Tax Harvesting Strategies
Offset gains with losses: If you have losing positions, sell them in the same year to reduce your taxable gains. This is called "tax-loss harvesting."
Example: You made $10k on Stock A but lost $4k on Stock B. Sell both in the same year → you only pay tax on the $6k net gain.
❓ Frequently Asked Questions
What is the difference between short-term and long-term capital gains tax?
Short-term gains (held ≤ 1 year) are taxed as ordinary income at your regular tax bracket (up to 37%). Long-term gains (held > 1 year) get preferential rates of 0%, 15%, or 20% depending on your income. Holding just one day longer can save you thousands in taxes.
How do I calculate capital gains tax?
Capital Gains Tax = (Sale Price - Purchase Price) × Tax Rate. If you held the asset for more than 1 year, use the long-term capital gains rate (0%, 15%, or 20%). If held for 1 year or less, use your ordinary income tax rate.
Do I pay capital gains tax if I reinvest the money?
Yes. Reinvesting doesn't exempt you from capital gains tax (except in specific cases like 1031 exchanges for real estate or Opportunity Zones). You owe tax the year you sell, regardless of what you do with the proceeds.
What is the capital gains tax rate for 2025?
For 2025, long-term capital gains rates are: 0% (income up to ~$47k single/$94k married), 15% (up to ~$518k single/$584k married), and 20% (above those thresholds). Short-term gains are taxed at ordinary income rates (10%-37%).