Glossary
Long-term capital gain
A US capital gain on an asset held more than one year, taxed at 0%, 15% or 20% depending on taxable income.
A long-term capital gain is the profit from selling a capital asset, such as a stock, fund or bond, that you held for more than one year. In the US these gains are taxed at preferential rates of 0%, 15% or 20%, well below the ordinary income rates applied to short-term gains, which is why the holding period is one of the most important numbers in a taxable account.
Counting the holding period
The holding period starts the day after you acquire the asset and includes the day you sell. To be long-term it must run more than one year.
2026 rates and brackets
The rate depends on your taxable income, with gains stacked on top of ordinary income. For 2026 (Rev. Proc. 2025-32):
| Filing status | 0% up to | 15% up to | 20% above |
|---|---|---|---|
| Single | $49,450 | $545,500 | $545,500 |
| Married filing jointly | $98,900 | $613,700 | $613,700 |
| Head of household | $66,200 | $579,600 | $579,600 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
A single filer with $70,000 of taxable ordinary income and a $10,000 long-term gain is already past the 0% threshold, so the whole gain is taxed at 15%: $1,500. Higher earners may also owe the 3.8% net investment income tax on top, above $200,000 of modified AGI for single filers and $250,000 for joint filers.
Exceptions and offsets
Gains on collectibles are taxed at up to 28%, and part of a gain on depreciated real estate at up to 25%. Capital losses offset gains first; up to $3,000 of net loss a year can offset ordinary income, with the rest carried forward.