📈Capital Gains Tax Calculator
Calculate taxes on your investment profits from stocks, real estate, and cryptocurrency.
Frequently Asked Questions
What are capital gains taxes?
Capital gains tax is paid on the profit from selling an investment like stocks, real estate, or crypto. If you buy stock for $10,000 and sell for $15,000, you have a $5,000 capital gain. The tax rate depends on how long you held the asset: short-term (under 1 year) is taxed as ordinary income (10-37%), while long-term (1+ years) gets preferential rates (0%, 15%, or 20%).
What's the difference between short-term and long-term capital gains?
Short-term gains (assets held under 1 year) are taxed as ordinary income at your regular tax rate (10-37%). Long-term gains (held over 1 year) get special lower rates: 0% if you're in the 10-12% tax brackets, 15% for most people, and 20% for high earners ($492,300+ single, $553,850+ married). Holding investments over a year can save 5-17% in taxes on your profits.
Do I pay capital gains tax on cryptocurrency?
Yes! The IRS treats cryptocurrency as property, not currency. Selling, trading, or even spending crypto triggers capital gains tax. If you bought Bitcoin for $10,000 and sold for $15,000, you owe tax on the $5,000 gain. Trading one crypto for another (like Bitcoin for Ethereum) also creates a taxable event. Keep detailed records of all transactions including the purchase price (cost basis) and sale price.
Can I offset capital gains with capital losses?
Yes! Capital losses offset capital gains dollar-for-dollar. If you have $10,000 in gains and $4,000 in losses, you only pay tax on $6,000. If losses exceed gains, you can deduct up to $3,000 against ordinary income annually, carrying forward remaining losses to future years. This 'tax-loss harvesting' strategy can significantly reduce your tax bill. Match short-term losses with short-term gains for maximum benefit.
How can I avoid or reduce capital gains tax?
Strategies to minimize capital gains tax: 1) Hold investments over 1 year for lower long-term rates, 2) Harvest tax losses to offset gains, 3) Use retirement accounts (401k, IRA) where gains grow tax-free, 4) Gift appreciated assets to family in lower tax brackets, 5) Donate appreciated stock to charity (avoid tax and get deduction), 6) For real estate, use 1031 exchange to defer taxes, 7) Time sales to stay in lower tax brackets.