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

Assets held for one year or less before sell incur short-term capital gains, taxed at standard progressive federal income brackets. Assets held for longer than one year qualify for long-term rates (0%, 15%, or 20%), which are significantly cheaper.

How does Net Investment Income Tax (NIIT) affect capital gains?

NIIT is an extra 3.8% surtax applied to net investment income (including capital gains, dividends, and interest) of high-income filers whose Modified Adjusted Gross Income exceeds $200,000 for single filers or $250,000 for couples filing jointly.

Can capital losses offset capital gains tax?

Yes. Capital losses can completely offset capital gains. If your net losses exceed your total capital gains, you can deduct up to $3,000 of the net losses against your ordinary wage income annually, carrying forward any remainder.

Capital Gains Tax Calculator

Project capital gains tax liabilities on security assets (stocks, Bitcoin) or real estate investments. Factors in long-term preferential schedules, Net Investment Income Tax (NIIT), and income level shifts.

Investment Details

Purchase Price / Cost Basis ($)

Asset Selling Price ($)

Adjust Selling Price $95,000

Asset Holding Period

Filing Status

Tax Year

Your Other Taxable Income ($ / Year)

Includes ordinary job salary, interest, and business wages.

Capital Gains Summary

Estimated Federal Capital Gains Liability

$0.00

Total Capital Gain (Profits)	$0.00
Asset Cost Basis	$0.00
Asset Selling Proceeds	$0.00
Applied Tax Treatment	Long-Term (15.0%)
Net Investment Income Tax (NIIT 3.8%)	+$0.00
Effective Capital Gains Surtax	15.00%
Net Keepable proceeds (After Tax)	$0.00

Profits vs Tax Breakdown

Keepable Net Profit Tax Slashed

How Capital Gains Taxes are Calculated

The calculation matches standard IRS capital schedules depending on asset holding type (Long-Term or Short-Term) and filer baseline earnings:

Short-Term Gains: If held for ≤ 1 year, the gain represents standard taxable compensation and progressive marginal thresholds (10% to 37%) apply directly to your capital earnings.
Long-Term Gains: If held for > 1 year, cheaper investment caps apply:
- 0% rate applies if your total combined taxable earnings fall underneath lower bounds.
- 15% rate represents the standard median investment bracket.
- 20% rate applies on high wealth tiers.
Net Investment Income Tax (NIIT): An additional federal 3.8% tax applies to the capital gain if Modified AGI exceeds $200k (Single) or $250k (Married joint).

Verified & Reviewed by Michael Carter, Senior Financial Content Specialist & Personal Finance Research Analyst

Michael Carter is a Financial Content Specialist at Findensity, where he researches and writes about personal finance, banking, credit cards, investing, insurance, taxes, loans, and financial planning. His work focuses on simplifying complex financial topics into clear, actionable guidance that helps readers make informed money decisions.

Professional Advice Disclaimer: Capital gains rules include complex adjustments for real estate exclusions (IRS Section 121 exclusions up to $250k single / $500k joint), wash sales, and depreciation recapture. Please consult with a designated CPA or personal investment fiduciary for precise filings.