This calculator estimates federal income tax on a long-term capital gain (i.e., gain from a capital asset held more than one year), using the preferential rate brackets of § 1(h) and the 3.8% net investment income tax under § 1411 where applicable. The calculator uses tax-year 2026 brackets, which apply to returns filed in 2027 (per IRS Rev. Proc. 2025-32). Brackets are inflation-adjusted annually; verify current-year brackets before relying on the result. NIIT thresholds are statutory and not inflation-adjusted.
Tax-year 2026 long-term capital gain brackets (per IRS Rev. Proc. 2025-32):
The brackets are applied to total taxable income (ordinary income + gain) sequentially, so that ordinary income is “used up” first against the lower brackets and the gain falls in whatever bracket(s) remain.
Net Investment Income Tax (NIIT) under § 1411 imposes an additional 3.8% on net investment income to the extent modified AGI exceeds $200,000 (single, HoH), $250,000 (MFJ), or $125,000 (MFS). These thresholds are statutory and have not been inflation-adjusted since enactment in 2013. NIIT generally does not apply to gain from the disposition of property held in an active trade or business or to certain gain on the disposition of an interest in an active partnership.
Important. This calculator addresses federal tax only on the long-term capital gain at preferential rates. It does not address: (i) state income tax (which often does not honor the federal preferential rate); (ii) depreciation recapture under § 1245 (taxed at ordinary rates) or unrecaptured § 1250 gain (taxed at a maximum rate of 25%); (iii) the 28% rate on collectibles and certain qualified small business stock; (iv) alternative minimum tax interactions; (v) the qualified business income deduction under § 199A; or (vi) the additional Medicare tax of 0.9% on earned income above the NIIT thresholds. Tax brackets are revised annually for inflation. The calculator is illustrative; verify all figures against current-year IRS guidance before acting.
The calculations above are based on simplified assumptions. To discuss your specific situation with the firm, contact us directly.
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