Tax / capital gains

Capital gains tax calculator

Long-term gains are not taxed in isolation: they stack on top of your ordinary income, so the same gain can cost 0%, 15% or 20% depending on what is underneath it. This engine splits the gain across the 2025 bands, adds the 3.8% net investment income tax where it applies, and shows the blended rate.

HoldingLong-termFilingSingleNIITNo

Capital gains tax

$7,500

15.0% of the gain, before NIIT

Marginal gain rate

15%

Rate on the last dollar of gain

Net investment income tax

Not applicable

MAGI below $200,000

Total on the gain

$7,500

Effective 15.00%

Gain by rate band

Long-term gains stack on top of ordinary taxable income, so the 0% band may already be full.

$50,000 gain

Gain by rate band
Rate	Amount	Tax
15%	$50,000	$7,500

Ordinary income of $60,000 is taxed separately at $8,114. State tax is not included.

Tax on the gain as it grows

The slope steps up when the gain crosses into the 15% and 20% bands.

Gain split by rate

How much of the gain lands in each band.

Canonical equations

The exact relationships implemented by this engine.

gain starts at ordinary taxable income · The 0% band is consumed by ordinary income first.

Σ gain-in-band × rate · 0%, 15% and 20% bands for 2025.

3.8% × min(NII, MAGI − threshold) · Threshold 200,000 single / 250,000 married.

(gains tax + NIIT) / gain · Blended rate on the realised gain.

Show model notation and computationOpen the symbolic form, the variable definitions, and the step-by-step derivation when you need the detail.

A clear path from inputs to results.

A long-term capital gain is not taxed at a flat rate: it stacks on top of your ordinary income and fills the 0%, 15% and 20% bands in order. This calculator splits the gain across the 2025 bands, adds the 3.8% net investment income tax where it applies, and reports the blended rate.

Step-by-step methodWorked exampleAssumptions explained

Worked example

$50,000 gain on top of $60,000 of ordinary taxable income

Inputs

Ordinary taxable income $60,000.
Long-term gain $50,000.
Single filer, no other investment income.

Calculation path

1
The 0% band ends at $48,350, but ordinary income already fills it.
2
The entire $50,000 gain therefore sits in the 15% band.
3
Capital gains tax: 50,000 × 0.15 = $7,500.
4
MAGI is $110,000, below the $200,000 NIIT threshold, so no 3.8% surtax.
5
Effective rate on the gain: 15.0%.

Result

Capital gains tax $7,500 · effective 15.0% · no NIIT.

Interpreting the result

Timing is the lever. The same gain costs nothing if it lands while ordinary income is low enough to leave room in the 0% band, and 20% plus NIIT if it lands on top of a large income year. That is why retirees often realise gains before taking large IRA distributions, and why a sabbatical year can be an unusually cheap time to sell.

Assumptions & limitations

Long-term gains only (assets held more than one year). Short-term gains are taxed as ordinary income.

Federal rates for 2025; state tax is excluded.

The NIIT applies at 3.8% on the lesser of net investment income or MAGI above $200,000 single / $250,000 married.

No credits, phase-outs or alternative minimum tax are modelled.

Frequently asked questions

Why is my gain taxed at 15% when the 0% band exists?

The 0% band applies to the space above your ordinary taxable income. If ordinary income already exceeds the top of that band, none of the gain qualifies for 0%.

Does selling a house count?

Only the portion above the home-sale exclusion, and only if the property was held long enough. Primary-residence exclusions are not modelled here.

What is the net investment income tax?

A 3.8% surtax on investment income for taxpayers above the MAGI threshold. It sits on top of the capital gains rate, so the top combined rate is 23.8%.

How do I keep the gain in the 0% band?

Reduce ordinary taxable income in the same year, for example by delaying a retirement distribution or taking a lower-income year. The engine lets you test that directly.