Compare short-term and long-term federal capital-gains tax treatment using 2026 IRS brackets and long-term gain thresholds.
The Short-Term vs Long-Term Capital Gains Calculator compares the federal tax effect of selling an asset now (short-term) versus holding it long enough for long-term treatment. It shows the estimated tax owed, after-tax gain, and the dollar savings from the holding-period change.
Short-term gains are taxed through the ordinary-income bracket stack. Long-term gains use the preferential 0%, 15%, and 20% federal rate structure, with the gain layered on top of your other taxable income. The difference can be meaningful when a sale spans multiple ordinary brackets or when your ordinary income still leaves room inside the 0% or 15% long-term capital-gains bands.
Use this calculator as a federal planning worksheet before rebalancing, harvesting gains, or deciding whether waiting past the one-year mark materially changes the after-tax result. It does not include state tax or the 3.8% Net Investment Income Tax (NIIT).
Holding period can change the federal tax result by thousands of dollars, especially when a short-term gain pushes part of the sale into a higher ordinary bracket. This calculator quantifies that difference with bracket-by-bracket math instead of treating the whole gain as if it were taxed at one flat ordinary rate.
Short-Term Tax = Federal tax on (Ordinary Income + Gain) - Federal tax on Ordinary Income Long-Term Tax = 0% Portion x 0 + 15% Portion x 0.15 + 20% Portion x 0.20 Tax Savings = Short-Term Tax - Long-Term Tax After-Tax Gain = Gain - Tax Owed
Result: ST tax: $8,986 | LT tax: $6,000 | Savings: $2,986
With $75,000 of other taxable income, a $40,000 short-term gain fills the rest of the 22% bracket and spills part of the gain into the 24% bracket, creating about $8,986 of federal tax. The same gain qualifies entirely for the 15% long-term band, so the long-term tax is $6,000. The holding-period difference is about $2,986 before state tax or NIIT.
Short-term gains are not always taxed at one flat rate. If the gain straddles two ordinary brackets, part of the gain can be taxed at one rate and the rest at the next. Long-term gains work differently: they use the long-term capital-gains bands after your ordinary taxable income has already occupied part of those thresholds.
This calculator estimates federal tax only. It applies the current bracket schedule for ordinary income, then compares that result with the federal 0% / 15% / 20% long-term capital-gains structure using the same filing status and other taxable income input.
The result does not include state tax, NIIT, wash-sale rules, basis adjustments, or the separate treatment of collectibles and Section 1250 gain. Use it as a holding-period worksheet, then confirm the final tax picture with your broader return context.
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This calculator compares two federal scenarios for the same gain. In the short-term scenario, it computes federal tax on ordinary taxable income with and without the gain, then uses the difference as the short-term capital-gains tax. In the long-term scenario, it layers the gain on top of the entered ordinary taxable income and allocates that gain through the 2026 long-term capital-gains thresholds for the selected filing status.
It is a federal planning worksheet only. It does not include NIIT, state tax, collectibles rates, Section 1250 recapture, loss netting, or basis adjustments.
You generally must hold the asset for more than one year. The holding period starts the day after acquisition, so selling exactly one year after purchase is still short-term.
Yes. Short-term gains are taxed as ordinary income, so if the gain crosses a bracket boundary, part of it can be taxed at one rate and the rest at the next rate.
Yes. Long-term gains are stacked on top of your other taxable income, so one portion of the gain can use the remaining 0% room and the rest can move into the 15% band.
High-income taxpayers may owe the 3.8% Net Investment Income Tax (NIIT) on top of the regular capital-gains rate. State income tax may also apply. This calculator keeps the comparison focused on the federal ordinary bracket stack and the federal long-term capital-gains thresholds only.
Not always. The tax savings can be meaningful, but the investment may move against you while you wait. The tax result is only one part of the decision.