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

Short-term gains apply to assets held one year or less and are taxed at ordinary income rates (10%–37% federal). Long-term gains apply to assets held more than one year and use the preferential 0/15/20% schedule. The holding period starts the day after you acquire the asset and ends on the day you sell it.

How does the 3.8% Net Investment Income Tax (NIIT) work in 2026?

The NIIT is an extra 3.8% federal tax on net investment income (including capital gains, dividends, interest, and rental income) for taxpayers with modified AGI above $200,000 (single / HoH) or $250,000 (MFJ). The NIIT thresholds are NOT indexed for inflation, so more taxpayers owe it every year.

Are qualified dividends taxed at capital gains rates in 2026?

Yes. Qualified dividends — payments from U.S. corporations and certain qualified foreign corporations held for more than 60 days during the 121-day period around the ex-dividend date — are taxed at the same 0/15/20% rates as long-term capital gains. Non-qualified (ordinary) dividends are taxed as ordinary income.

How are real estate capital gains taxed in 2026?

Gains on investment real estate held over one year qualify for long-term rates (0/15/20%), but depreciation recapture is taxed at a maximum of 25% as 'unrecaptured §1250 gain.' Primary residences can exclude up to $250,000 (single) or $500,000 (MFJ) of gain under §121 if you owned and lived in the home for at least 2 of the past 5 years.

What is the capital gains tax on collectibles in 2026?

Long-term gains on 'collectibles' — art, antiques, coins, precious metals, certain crypto NFTs — are taxed at a maximum 28% federal rate, not the 0/15/20% schedule. Short-term collectible gains follow ordinary income rates like any other short-term gain.

Do states tax capital gains separately?

Most states tax capital gains as ordinary income at their normal income tax rates. A few states (Washington, for example) have a dedicated capital gains tax; nine states have no individual income tax at all. See our state tax guides for state-by-state treatment.

How can I reduce 2026 capital gains taxes?

Common strategies: harvest losses to offset gains (tax-loss harvesting), hold assets over one year to qualify for LTCG rates, use tax-advantaged accounts (401(k), IRA, HSA), donate appreciated stock to charity instead of cash, time gains into low-income years to capture the 0% bracket, and use §1031 like-kind exchanges for investment real estate.

2026 Capital Gains Tax Rates (Federal)

Long-term capital gains and qualified dividends are taxed on a separate 0% / 15% / 20% schedule, not the ordinary federal tax brackets. Below are the official 2026 thresholds from IRS Revenue Procedure 2025-32, plus the 3.8% Net Investment Income Tax, real estate and collectibles rules, and planning strategies.

Last Updated for Tax Year 2026 · January 5, 2026 · Source: IRS Rev. Proc. 2025-32 + IRS Notice 2025-67

2026 Long-Term Capital Gains Brackets

Filing Status	0% Rate	15% Rate	20% Rate
Single	Up to $49,450	$49,451 – $545,500	Over $545,500
Married Filing Jointly	Up to $98,900	$98,901 – $613,700	Over $613,700
Married Filing Separately	Up to $49,450	$49,451 – $306,850	Over $306,850
Head of Household	Up to $66,200	$66,201 – $579,600	Over $579,600

Thresholds apply to total taxable income, not just capital gains. Stack ordinary income first, then layer gains on top.

Short-Term vs. Long-Term

Holding period > 1 year = long-term, taxed at the preferential rates above. ≤ 1 year = short-term, taxed at ordinary 2026 federal brackets (10–37%). The one-year mark is calendar days — selling on the anniversary date is still short-term; you need at least one day past the anniversary.

3.8% Net Investment Income Tax

High-income taxpayers owe an additional 3.80% on net investment income above the MAGI thresholds:

Single: $200,000
Married Filing Jointly: $250,000
Married Filing Separately: $125,000
Head of Household: $200,000

NIIT thresholds have not changed since 2013 and are not inflation-indexed.

Qualified Dividends

Qualified dividends from U.S. corporations (held > 60 days within the 121-day window around the ex-dividend date) are taxed at the same 0/15/20% rates as long-term capital gains. Non-qualified dividends (REITs, MLPs, money market funds, employee stock options) are ordinary income.

Real Estate & Collectibles

Primary residence: §121 exclusion of $250K (single) / $500K (MFJ) of gain if owned & used as primary home 2 of last 5 years.
Depreciation recapture (§1250): max 25% federal rate on the depreciation portion of a real estate gain.
Collectibles (§408(m)): art, coins, gold/silver, antiques — max 28% federal LTCG rate.
Qualified small business stock (§1202): potential 100% exclusion of gain on QSBS held > 5 years.
§1031 like-kind exchanges: investment real estate only — defer gain by rolling into a like-kind replacement property.

2026 Capital Gains Planning

Harvest losses to offset realized gains; up to $3,000 of net losses can offset ordinary income, with the remainder carried forward indefinitely.
Hold > 1 year to drop from 37% top ordinary rate to 20% LTCG (a 17-point swing).
Use the 0% bracket — single filers with taxable income under $49,450 pay zero federal tax on LTCG.
Donate appreciated stock to charity — deduct fair market value, avoid the capital gains tax entirely.
Max out 401(k) and IRA contributions to shelter growth.

Calculators & Related Pages

Sources & Methodology

IRS Revenue Procedure 2025-32 — 2026 inflation adjustments including §1(h) LTCG thresholds.
Internal Revenue Code §1(h), §1411 (NIIT), §121 (home sale exclusion), §1202 (QSBS), §1031.
IRS Publication 550 (Investment Income and Expenses).
TaxEase.money methodology and data sources.

Frequently Asked Questions

Long-term capital gains (LTCG) and qualified dividends are taxed at 0%, 15%, or 20% in 2026 based on your taxable income and filing status. Single filers pay 0% up to $49,450, 15% up to $545,500, and 20% above. Married filing jointly: 0% up to $98,900, 15% up to $613,700, 20% above. These thresholds come from IRS Revenue Procedure 2025-32.

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