Capital Gains Tax Rates Cheat Sheet
2025 Long-Term Capital Gains Rates (Federal)
Applies to assets held longer than one year before selling.
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 0% | Up to $48,350 | Up to $96,700 | Up to $64,750 |
| 15% | $48,351 – $533,400 | $96,701 – $600,050 | $64,751 – $566,700 |
| 20% | Over $533,400 | Over $600,050 | Over $566,700 |
Short-Term Capital Gains Rates (2025)
Applies to assets held one year or less. Taxed as ordinary income at your marginal rate.
| Tax Bracket | Single | Married Filing Jointly |
|---|---|---|
| 10% | Up to $11,925 | Up to $23,850 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 |
| 37% | Over $626,350 | Over $751,600 |
Net Investment Income Tax (NIIT)
| Detail | Specification |
|---|---|
| Rate | 3.8% surtax on net investment income |
| Single threshold | Modified AGI over $200,000 |
| MFJ threshold | Modified AGI over $250,000 |
| What’s included | Capital gains, dividends, interest, rental income, royalties |
| Maximum effective rate | 20% + 3.8% = 23.8% on long-term gains for high earners |
Special Asset Categories
| Asset Type | Tax Treatment | Max Rate |
|---|---|---|
| Qualified dividends | Same rates as long-term capital gains | 20% + 3.8% NIIT |
| Collectibles (art, coins, wine) | Long-term gains taxed at special rate | 28% |
| Section 1250 (real estate depreciation recapture) | Unrecaptured depreciation taxed at special rate | 25% |
| Qualified Small Business Stock (QSBS) | Up to 100% exclusion if held 5+ years (Section 1202) | 0% on up to $10M gain |
| Cryptocurrency | Treated as property; same short/long-term rules apply | 37% short / 20% long |
| REIT dividends | Ordinary income (not qualified); 20% QBI deduction may apply | 29.6% effective (37% × 0.8) |
Key Tax Reduction Strategies
| Strategy | How It Works | Annual Limit |
|---|---|---|
| Tax-Loss Harvesting | Sell losing investments to offset gains; carry excess losses forward | $3,000 net loss deduction per year; unlimited carryforward |
| Hold 1+ year | Convert short-term gains (up to 37%) to long-term (0–20%) | No limit |
| Use tax-advantaged accounts | Hold assets in Roth IRA or 401(k) to defer or eliminate taxes | Subject to contribution limits |
| Qualified Opportunity Zones | Defer and reduce capital gains by investing in designated areas | No limit; must hold 10+ years for max benefit |
| Charitable giving | Donate appreciated stock to avoid capital gains entirely | 30% of AGI for appreciated assets |
| Step-up in basis at death | Heirs receive assets at current market value, erasing unrealized gains | Unlimited (under current law) |
Key Takeaways
- Long-term capital gains (held 1+ year) are taxed at 0%, 15%, or 20% — far below ordinary income rates
- Short-term gains are taxed as ordinary income at up to 37%
- The 3.8% NIIT adds to both short and long-term rates for high earners (AGI > $200K single / $250K MFJ)
- Tax-loss harvesting can offset gains dollar-for-dollar with no cap
- Collectibles face a maximum 28% rate; QSBS stock can qualify for 0% if held 5+ years
Frequently Asked Questions
What is the difference between short-term and long-term capital gains?
The distinction is purely about holding period. Assets held for one year or less generate short-term gains, taxed at your ordinary income rate (10%–37%). Assets held for more than one year generate long-term gains, taxed at preferential rates (0%, 15%, or 20%). The one-year clock starts the day after purchase.
What is the Net Investment Income Tax?
The NIIT is a 3.8% surtax on investment income (capital gains, dividends, interest, rental income) for taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly). It applies to the lesser of your net investment income or the amount by which your MAGI exceeds the threshold.
Can I offset capital gains with capital losses?
Yes. Capital losses first offset gains of the same type (short-term losses offset short-term gains). Remaining losses then offset the other type. If total losses exceed total gains, you can deduct up to $3,000 per year against ordinary income. Excess losses carry forward indefinitely to future tax years.
How are cryptocurrency gains taxed?
The IRS treats cryptocurrency as property, not currency. Every sale, trade, or exchange is a taxable event. Short-term crypto gains (held ≤1 year) are taxed at ordinary income rates. Long-term crypto gains (held >1 year) get the preferential 0/15/20% rates. Crypto-to-crypto trades are also taxable — you can’t defer gains by swapping one token for another.
What is the step-up in basis at death?
When someone dies, their heirs receive inherited assets at the current fair market value — not the original purchase price. This “step-up” effectively erases all unrealized capital gains. For example, if someone bought stock at $10 and it’s worth $100 at death, the heir’s cost basis is $100. If they sell immediately, they owe zero capital gains tax.