This post shows the 2026 thresholds next to 2025, explains which gains qualify for the lower rates, and covers the exceptions, the loss limit and the forms. It is general information, not advice about buying or selling anything.
Try it: Tax bracket calculatorYour marginal and effective rate, tax by bracket and the dollars left before the next bracket.Short-term versus long-term
The IRS says a capital asset is almost anything you own and use for personal or investment purposes, such as a home, household furnishings, stocks or bonds. When you sell one, the difference between your adjusted basis (generally your cost) and the amount you receive is a capital gain or loss.
The holding period decides the type. If you held the asset for more than one year, the gain or loss is long-term. If you held it one year or less, it is short-term. The IRS says to count from the day after you acquired the asset up to and including the day you disposed of it. Net short-term gains are taxed as ordinary income at the regular graduated rates, while net long-term gains get the special rates below. Property you received as a gift or inheritance has different basis rules, which are in Publication 551.
What "net capital gain" means
The special rates apply to your net capital gain. The IRS defines it as the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Your net long-term gain is your long-term gains reduced by long-term losses, including any unused long-term loss carried over from earlier years. In plain terms, losses are netted against gains before the rates are applied, which is why the loss rules further down matter.
2026 long-term rate thresholds
The thresholds apply to your taxable income, not only to the gain. For 2026, the IRS lists these maximum amounts.
| Filing status | 0% rate up to (2025) | 0% rate up to (2026) | 15% rate up to (2025) | 15% rate up to (2026) |
|---|---|---|---|---|
| Single | $48,350 | $49,450 | $533,400 | $545,500 |
| Married filing jointly or qualifying surviving spouse | $96,700 | $98,900 | $600,050 | $613,700 |
| Head of household | $64,750 | $66,200 | $566,700 | $579,600 |
| Married filing separately | $48,350 | $49,450 | $300,000 | $306,850 |
The 20% rate applies to the extent your taxable income is above the 15% amount for your filing status. The 2025 figures come from IRS Topic no. 409. The 2026 figures come from Revenue Procedure 2025-32.
The 2026 thresholds are higher than 2025 in every filing status, so more income falls in the 0% and 15% ranges. The rate depends on your total taxable income and on how long you held the asset.
Say a single filer has $40,000 of taxable income for 2026, including a $5,000 long-term gain. Because taxable income is below the $49,450 threshold, the 0% rate would apply to that gain. If taxable income were instead $60,000, the 15% rate would generally apply. This is a hypothetical illustration, and a gain can straddle two ranges, so check the IRS worksheets for your return.
Gains taxed at higher rates
Some gains do not follow the 0%, 15% and 20% schedule. The IRS lists these exceptions:
- The taxable part of a gain from selling qualified small business stock under section 1202 is taxed at a maximum rate of 28%.
- Net gains from selling collectibles, such as coins or art, are taxed at a maximum rate of 28%.
- The part of any unrecaptured section 1250 gain from selling real property is taxed at a maximum rate of 25%.
The 3.8% net investment income tax
A separate 3.8% net investment income tax (NIIT) can apply on top of the capital gains rate. The IRS says it applies to the lesser of your net investment income or the amount by which your modified adjusted gross income is above these thresholds:
| Filing status | Threshold |
|---|---|
| Married filing jointly or qualifying surviving spouse | $250,000 |
| Married filing separately | $125,000 |
| Single or head of household | $200,000 |
Capital losses
If your capital losses are more than your capital gains, the IRS says the amount you can use to lower your other income is the smaller of $3,000 ($1,500 if married filing separately) or your total net loss. You claim it on line 7a of Form 1040. Any loss above the limit can be carried forward to later years, and the Capital Loss Carryover Worksheet in Publication 550 or the Schedule D instructions shows how.
Losses on personal-use property, such as your home or car, are not deductible, according to the IRS. Publication 550 has more on investment losses.
Where to report sales
The IRS says most sales and other capital transactions are figured on Form 8949, Sales and Other Dispositions of Capital Assets, and then summarized on Schedule D (Form 1040). If Schedule D does not apply to you, there is a box on line 7b of Form 1040 to check.
Thinking about year-end
The tax year for gains and losses on a calendar-year return is 2026, so the thresholds above apply to sales in 2026, with returns generally filed in 2027. If you are comparing your expected income with these thresholds, our federal tax bracket calculator and the guide to federal tax brackets can help you see where income falls. The year-end tax planning checklist lists other items to review before December 31.
For a shorter explainer that also covers the home-sale exclusion, see our capital gains rates page. The final word on thresholds is the IRS, so confirm the numbers in Revenue Procedure 2025-32 and Topic no. 409 from the sources list.
Sources
Figures, dates and rules in this post were checked against these official pages on October 18, 2026. Open them to confirm the current numbers before you act.
- IRS: Revenue Procedure 2025-32, 2026 maximum capital gains rate amounts (PDF)
- IRS: Topic no. 409, Capital gains and losses
- IRS: Tax year 2026 annual inflation adjustments (IR-2025-103)
- IRS: Topic no. 559, Net investment income tax
- IRS: About Schedule D (Form 1040), Capital Gains and Losses
- IRS: About Form 8949, Sales and Other Dispositions of Capital Assets
- IRS: Publication 550, Investment Income and Expenses
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.