How to use this calculator
Enter your original purchase price and the price you sold (or plan to sell) the asset for. Select whether you held the asset for more or less than one year, and choose your tax filing status.
Add your taxable income (not including this sale) so the calculator can determine your correct tax bracket. Include any capital improvements or selling expenses like broker commissions to increase your cost basis and reduce the taxable gain.
The calculator instantly shows your estimated tax, net proceeds, effective tax rate, and whether the Net Investment Income Tax applies to your situation.
Understanding capital gains tax
When you sell an asset for more than you paid, the profit is called a capital gain. The IRS taxes these gains differently depending on how long you held the asset before selling.
Short-term gains (assets held one year or less) are taxed at your ordinary income tax rate, which can be as high as 37%. Long-term gains (assets held more than one year) receive preferential rates of 0%, 15%, or 20% depending on your total taxable income.
High earners may also owe the 3.8% Net Investment Income Tax on top of the standard capital gains rate. This additional tax applies when your modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly.
Frequently asked questions
What is the difference between short-term and long-term capital gains?
Short-term gains apply to assets held one year or less and are taxed at ordinary income rates (10% to 37%). Long-term gains apply to assets held more than one year and benefit from reduced rates of 0%, 15%, or 20%.
What is the Net Investment Income Tax?
The NIIT is an extra 3.8% tax on investment income for high earners. It applies when your modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), on top of regular capital gains tax.
How does cost basis reduce my tax?
Your cost basis includes the purchase price plus improvements and selling expenses. A higher basis means a smaller taxable gain. Always track renovation costs, broker fees, and other expenses that can be added to your basis.
Can I avoid capital gains tax on my home?
If you owned and lived in your home for at least 2 of the last 5 years, you can exclude up to $250,000 (single) or $500,000 (married filing jointly) of gain under the Section 121 exclusion. This calculator does not automatically apply that exclusion.
What if I sell at a loss?
Capital losses offset gains dollar for dollar. If losses exceed gains, you can deduct up to $3,000 per year against ordinary income. Remaining losses carry forward indefinitely to future tax years.