Long-Term Capital Gains Rates for 2026

What Are Capital Gains?

Capital gains are the profits you receive when you sell an asset for more than you paid for it. According to the IRS, almost anything you own is an asset, including stocks, bonds, cryptocurrency, real property and vehicles.

If the difference between what you paid for an asset and what you sell it for is positive, it's considered a capital gain. If you sell an asset for less than you paid for it, you have a capital loss.

What Is Capital Gains Tax?

Capital gains tax applies when you sell an asset at a profit. The amount of tax you pay depends on the type of asset, the length of time you owned the asset, and your taxable income and tax filing status.

Capital gains taxes are divided into two types:

Short-Term Capital Gains Tax

The short-term capital gains tax applies to profits you earn from selling assets you've owned for a year or less. Short-term capital gains are taxed at the same rate as your ordinary income, based on your tax bracket. Income tax rates range from 0% to 37%.

Learn more: How Do Tax Brackets Work?

Long-Term Capital Gains Tax

Long-term capital gains tax rates apply to profits from the sale of assets you own for more than a year. Long-term capital gains are taxed at 0%, 15% and 20%, depending on your income and filing status (see below).

Long-Term Capital Gains Tax Rates for 2026

Long-term capital gains rates are based on your filing status and taxable income (including deductions and credits). Long-term capital gains tax rates adjust every year for inflation. Here are long-term capital gains rates for the 2026 tax year.

Source: IRS

Long-Term Capital Gains Tax Rates for 2025

Here are the 2025 long-term capital gains rates, which apply to the tax return you submit in April 2026.

Source: IRS

Additional Capital Gains Tax Rates

Special capital gains tax rates may apply if you sell any of the following assets for a gain:

• Collectibles: Gains from the sale of collectible items such as antiques or art are taxed at a maximum of 28%.
• Small business stock: If you sell qualified small business stock, capital gains are taxed at a maximum of 28%.
• Depreciated real estate: A portion of your profits from the sale of certain depreciated property may be taxed at a maximum of 25%.

You may also owe a 3.8% net investment income tax (NIIT) on modified adjusted gross income or net investment income over the following thresholds:

• $200,000 for single taxpayers
• $250,000 for married couples filing jointly
• $125,000 for married people filing separately

How to Reduce Capital Gains Taxes

Here are four strategies to reduce the amount of capital gains tax you owe:

Hold Assets for More Than a Year

Holding assets for more than a year before selling allows you to use more favorable long-term capital gains tax rates.

How much does that save? If you're single and have $100,000 in taxable income, your short-term capital gains rate is 22%, based on your tax bracket. At 22%, a $10,000 short-term capital gain generates $2,200 in taxes. The same $10,000 gain is taxed at 15%, or $1,500, if you hold the asset for more than a year. That's a savings of 7%.

Tip: A financial advisor can help you manage your investments so you minimize your capital gains tax liability and hold on to more of your money.

Use Tax-Advantaged Accounts

Several types of tax-advantaged accounts allow you to defer, or even avoid, paying taxes on capital gains. Some of these accounts include individual retirement accounts (IRAs), 529 college savings plans, health savings accounts (HSAs) and 401(k) accounts.

With a traditional IRA or 401(k) for example, your capital gains are tax-deferred: You don't pay taxes on dividends or gains until you withdraw money from your account. With a Roth IRA, 529 account or HSA, your gains can be tax-free, as long as your withdrawals meet IRS qualifications.

Learn more: Traditional vs. Roth IRA: What's the Difference?

Employ Tax-Loss Harvesting

You can use capital losses to offset capital gains and reduce the amount of capital gains tax you owe. Tax-loss harvesting means deliberately selling your assets at a loss in order to reduce your taxable gains. Although tax-loss harvesting is a common practice among investors, you may want to consult an advisor first to learn more about selling investments at a loss.

Learn more: Can You Deduct a Capital Loss on Your Taxes?

Use the Home Sale Exclusion

You may exclude up to $250,000 in gains ($500,000 if married filing jointly) when you sell your primary residence. The home sale exclusion applies when you've owned and lived in the property for at least two of the previous five years.

Learn more: How Does Capital Gains Tax Work on Home Sales?

The Bottom Line

In general, long-term capital gains tax rates save you money over short-term capital gains rates. If you're looking for ways to reduce your tax bill, consider holding your assets for more than a year to qualify for long-term (versus short-term) capital gains rates. Using tax-advantaged accounts, tax-loss harvesting and the home sale exclusion are additional options.

Or, you may want to avoid selling assets at all, where that's possible. Capital gains taxes only apply when you realize a gain. If you hold on to your home, valuables or investments instead of selling, you won't have a gain to tax.