2025 Capital Gains Tax Calculator
Calculate the federal tax on stock sales, investment gains, and other capital gains for tax year 2025. Includes short-term, long-term, and the 3.8% Net Investment Income Tax.
Capital Gains Details
Held less than 1 year, taxed as ordinary income
Held more than 1 year, preferential rates
Tax Breakdown
Short-Term vs. Long-Term Capital Gains
The holding period determines how a gain is taxed at the federal level. Assets held one year or less generate short-term capital gains, taxed at ordinary income rates — the same seven federal brackets that apply to wages. Assets held more than one year generate long-term capital gains, taxed at the preferential rates of 0%, 15%, or 20% depending on your taxable income and filing status. The IRS measures the holding period from the day after acquisition through the day of sale; brokers report holding period on Form 1099-B.
The preferential long-term rate exists by congressional design — capital gains have received preferential federal treatment, in one form or another, since the Revenue Act of 1921. The Congressional Research Service publishes periodic analyses of the policy rationale and revenue impact of capital gains preferences if you want to read the legislative background.
The 3.8% Net Investment Income Tax (NIIT)
High-income taxpayers may owe an additional 3.8% federal tax on investment income — including capital gains — under IRC Section 1411. The NIIT applies to the lesser of net investment income or the amount by which modified adjusted gross income (MAGI) exceeds a fixed threshold: $200,000 for single filers, $250,000 for married filing jointly, $125,000 for married filing separately. These thresholds have not been inflation-adjusted since the tax was enacted in 2013, which means more taxpayers cross them each year as nominal incomes grow. The 3.8% NIIT is added on top of the long-term rate (0%, 15%, or 20%), so a high-income filer in the 20% bracket can face a 23.8% effective federal rate on long-term capital gains.
State Capital Gains Treatment Varies
Most U.S. states tax capital gains as ordinary income — at the same state-level brackets used for wages — without a federal-style preferential rate. Nine states (including Texas, Florida, and Washington for personal income tax purposes) have no broad-based personal income tax, so capital gains are not taxed at the state level for residents. Washington enacted a separate 7% state capital gains tax that applies above an annual exemption to long-term gains other than real estate. The TaxCompare state-by-state guide at /blog/capital-gains-tax-by-state covers each state's approach in detail.
What This Calculator Does Not Include
Several items intentionally fall outside the scope of this estimator. State capital gains tax is not computed because state treatment varies widely. Capital loss carryforwards (which let losses from prior years offset gains in later years) are not modeled. Qualified small business stock (QSBS) exclusions under IRC Section 1202, opportunity zone deferrals under IRC Section 1400Z, like-kind exchanges under Section 1031 (now limited to real property), and wash-sale adjustments under IRC Section 1091 are all out of scope. If any of these apply to your situation, the IRS publication 550 (Investment Income and Expenses) is the authoritative reference and a qualified tax professional can run the actual numbers on Form 8949 and Schedule D.
Methodology and Data Sources
Capital gains breakpoints come from the IRS Revenue Procedure for tax year 2025. The 3.8% NIIT and its thresholds come from IRC Section 1411 and the corresponding IRS regulations. State-level capital gains rates are taken from each state's Department of Revenue and cross-referenced against the Tax Foundation. The full methodology is documented at /methodology.
Frequently Asked Questions
What is the long-term capital gains tax rate?
For 2025, long-term capital gains — gains on assets held more than one year — are taxed at preferential federal rates of 0%, 15%, or 20% depending on your taxable income and filing status. The income breakpoints between the three rates are inflation-indexed annually by the IRS. High earners may also owe an additional 3.8% Net Investment Income Tax (NIIT) on top of the long-term rate. Long-term rates are lower than ordinary income rates by design — Congress applies preferential treatment to capital gains as a long-standing matter of federal tax policy.
What is the short-term capital gains tax rate?
Short-term capital gains — gains on assets held one year or less — are taxed at ordinary income rates, the same seven federal brackets that apply to wages and salaries. There is no preferential treatment for short-term gains. The holding period is measured from the day after the asset was acquired to the day of sale; brokers report this on Form 1099-B.
What is the Net Investment Income Tax (NIIT)?
The NIIT is a 3.8% federal surtax on investment income (interest, dividends, capital gains, rental income, and most passive business income) for taxpayers with modified adjusted gross income above a threshold. The thresholds are $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately. Unlike most tax provisions, the NIIT thresholds are not inflation-indexed and have remained at the same dollar amounts since the tax was enacted in 2013 as part of the Affordable Care Act. The NIIT is levied on the lesser of net investment income or the amount by which MAGI exceeds the threshold.
Are state capital gains taxes also calculated?
Most states tax capital gains as ordinary income — that is, at the same state-level brackets used for wages — without a federal-style preferential rate. A small number of states (such as Washington, which levies a 7% state capital gains tax above an exemption) treat them differently. Nine states have no broad-based personal income tax and therefore no state capital gains tax for residents. The TaxCompare state-by-state breakdown at /blog/capital-gains-tax-by-state covers each state's approach.
What does this calculator include and exclude?
The calculator computes federal short-term and long-term capital gains tax, applies the 0/15/20% breakpoints based on your filing status and other income, computes the 3.8% NIIT where applicable, and shows the combined federal tax. It does not compute state-level capital gains tax (state treatment varies widely), capital loss carryforwards, qualified small business stock (QSBS) exclusions under IRC Section 1202, opportunity zone deferrals, like-kind exchanges (real estate only), or wash-sale adjustments. The output is an estimate intended for planning, not a substitute for actual tax preparation.
Where does this data come from?
Capital gains breakpoints and the NIIT thresholds are taken directly from the IRS Revenue Procedure for tax year 2025 and from IRC Section 1411. The full methodology is documented at /methodology. Last refresh: April 2026. The figures used here match the official current-year IRS publications.