Work out the tax on an investment sale, and see how much holding for more than a year saves you.
The method behind this calculator
Assets held longer than a year qualify for long-term capital gains rates of 0%, 15% or 20% depending on your income. Sell sooner and the gain is taxed as ordinary income at your marginal rate, which is usually far higher.
Switching the holding period on this calculator shows the difference in dollars — often reason enough to wait out the twelve-month mark.
Try it with these numbers
On the values this calculator opens with, the capital gains tax is $2,250. Underneath, Capital gain comes out at $15,000 and Federal rate at 15%. Change any field and every figure updates as you type.
How to fill it in
- Enter your purchase and sale price.
- Choose whether you held it more or less than a year.
- Add your other income and filing status, plus any state rate.
Formula reference
gain = sale price − purchase price
long-term: 0% / 15% / 20% depending on total income
short-term: taxed at your ordinary marginal rate
FAQ
How long must I hold an asset for long-term rates?
More than one year from the day after purchase. At exactly one year or less, the gain is short-term.
Can capital gains tax be zero?
Yes — if your total income falls below the 0% threshold for your filing status, long-term gains are untaxed up to that limit.
Do losses offset gains?
Yes. Capital losses offset gains, and up to $3,000 of net loss can offset ordinary income each year. This is a general estimate, not tax advice.