Short-Term vs Long-Term Capital Gains
The single biggest factor in your capital gains tax bill is how long you held the asset. Hold one year or less and you pay ordinary income rates up to 37%. Hold just one day longer and you drop to the 0/15/20% long-term rates. Here's exactly what the difference costs — for stocks, crypto, or property.
Short-Term
- Held 1 year or less
- Taxed as ordinary income
- Same rate as your salary
- No preferential treatment
Long-Term
- Held more than 1 year
- Preferential capital gains rates
- Many pay 0% in lower brackets
- Max 20% + possible 3.8% NIIT
See your difference — the "one more day" calculator
Enter a gain and your income to see what you'd pay if you sold now (short-term) versus waiting past the one-year mark (long-term).
Federal only. Full calculator with state tax →
2026 rate comparison table
| Taxable income (single) | Short-term rate | Long-term rate |
|---|---|---|
| $0 – $12,400 | 10% | 0% |
| $12,401 – $49,450 | 12% | 0% |
| $49,451 – $50,400 | 12% | 15% |
| $50,401 – $105,700 | 22% | 15% |
| $105,701 – $201,775 | 24% | 15% |
| $201,776 – $256,225 | 32% | 15% |
| $256,226 – $545,500 | 35% | 15% |
| Over $545,500 | 37% | 20% |
Source: IRS Rev. Proc. 2025-32 (2026 tax year). NIIT of 3.8% may apply above $200,000 (single) / $250,000 (MFJ).
What counts as the holding period?
Your holding period starts the day after you buy the asset and includes the day you sell it. To qualify as long-term, you must hold for more than one year — at least one year and one day. Selling exactly on the one-year anniversary is still short-term.
Does this apply to crypto and real estate too?
Yes. The same one-year holding rule applies to cryptocurrency, stocks, and most investment property. Real estate has additional rules like the home-sale exclusion and depreciation recapture, but the short-term/long-term distinction is identical.