Capital Gains Tax Calculator

Estimate federal capital gains tax, state capital gains tax, Net Investment Income Tax, total tax, and net sales income from selling stocks, crypto, real estate, business assets, or other investments.

Capital Gains Tax Calculator

This Capital Gains Tax Calculator helps estimate the tax impact of selling investments or assets. It separates short-term capital gains from long-term capital gains, applies federal tax rules, estimates state capital gains tax, calculates Net Investment Income Tax, and shows your estimated net sales income after taxes.

Short-term gains generally apply to assets held for less than one year and are taxed as ordinary income. Long-term gains generally apply to assets held for one year or more and may qualify for preferential federal tax rates of 0%, 15%, or 20%, depending on taxable income and filing status.

How This Capital Gains Tax Calculator Works

The calculator estimates capital gains tax by comparing the purchase price and sale price of each asset. The difference is treated as the capital gain:

Capital Gain = Sale Price - Purchase Price

Each asset is classified as either short-term or long-term based on the holding period selected by the user.

• Short-term capital gains: Assets held for less than one year. These gains are taxed using ordinary federal income tax brackets.
• Long-term capital gains: Assets held for one year or more. These gains are taxed using preferential federal capital gain rates of 0%, 15%, and 20%.
• State capital gains tax: The calculator applies the selected state rate or special state rules.
• NIIT: The calculator estimates Net Investment Income Tax when income exceeds the applicable threshold.
• Net sales income: Sale proceeds after estimated federal capital gains tax, state tax, and NIIT.

Long-Term Capital Gain Brackets Used by This Calculator

Long-term capital gains are generally taxed at 0%, 15%, or 20% at the federal level. This calculator uses the following taxable income thresholds for long-term capital gains:

The calculator first applies ordinary taxable income to the applicable bracket space, then applies long-term capital gains to the remaining 0%, 15%, and 20% capital gain brackets.

Net Investment Income Tax

The Net Investment Income Tax, commonly called NIIT, is an additional federal tax that may apply to investment income, including capital gains. This calculator applies the NIIT rate entered by the user, with a default rate of 3.8%.

In the calculator, NIIT is estimated using the lesser of:

• The capital gain amount, or
• The amount by which taxable income plus capital gain exceeds the NIIT threshold.

NIIT rules can be complex. The result shown by this calculator is an estimate and may differ from your actual tax liability.

State Capital Gains Tax Rates Used by This Calculator

State capital gains tax rules vary by state. Some states tax capital gains as ordinary income, some have no state income tax, and some have special capital gains rules. This calculator uses the selected state rate or allows a custom state capital gains tax rate.

Other states with no broad state income tax include Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, Washington has a separate capital gains tax on certain long-term capital gains above the applicable exclusion amount.

Short-Term vs. Long-Term Capital Gains

The calculator also compares your current result with a hypothetical scenario where all short-term holdings are held long enough to qualify as long-term holdings. This helps estimate the potential tax savings from waiting until an asset has been held for more than one year.

In general, short-term gains are taxed at ordinary federal income tax rates, while long-term gains may qualify for lower federal tax rates. Depending on your income, filing status, state, and NIIT exposure, holding an asset for more than one year may reduce your total tax.

References

For official tax guidance, please refer to government tax resources:

• IRS Topic No. 409: Capital Gains and Losses
• IRS: Net Investment Income Tax
• IRS: Federal Income Tax Rates and Brackets
• California Franchise Tax Board: Capital Gains and Losses
• Washington Department of Revenue: Capital Gains Tax

Disclaimer

This Capital Gains Tax Calculator is provided for educational and informational purposes only. It provides an estimate based on the information entered and the tax assumptions built into the calculator. It does not provide legal, financial, accounting, or tax advice.

Actual tax liability may vary based on deductions, credits, exemptions, carryover losses, wash sale rules, depreciation recapture, qualified small business stock rules, state-specific rules, local taxes, alternative minimum tax, and other factors not included in this calculator.

Before making tax or investment decisions, consult a qualified tax professional, CPA, attorney, or financial advisor.

Frequently Asked Questions

What is a capital gain?

A capital gain occurs when you sell an asset for more than your purchase price or adjusted basis. For example, if you bought an asset for $5,000 and sold it for $10,000, the capital gain is $5,000.

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

Short-term capital gains generally apply to assets held for less than one year and are taxed as ordinary income. Long-term capital gains generally apply to assets held for one year or more and may be taxed at lower federal rates.

Does this calculator include state capital gains tax?

Yes. The calculator includes selected state rates for California, Connecticut, Florida, Illinois, Massachusetts, New Jersey, New York, Pennsylvania, Texas, Washington, and a custom input option.

Does this calculator include NIIT?

Yes. The calculator estimates Net Investment Income Tax using the NIIT rate entered by the user and the applicable income threshold for the selected filing status.

Can this calculator be used for stocks, crypto, or real estate?

The calculator can estimate capital gains tax for many types of assets, including stocks, cryptocurrency, real estate, business interests, and other investments. However, some assets may have special tax rules that are not included.