Held over a year? See your 0%, 15%, or 20% rate.
Stocks and ETFs held more than a year get preferential federal rates. See which tier you fall into, including NIIT for higher earners.
Why it matters: Holding for the long term can dramatically cut your tax — some investors even qualify for 0%. See where your income lands you.
Example calculation
Imagine you invested in an S&P 500 ETF: you bought 200 shares at $300 ($60,000) and sold them four years later at $450 ($90,000), a $30,000 long-term gain. You're married filing jointly with $120,000 of other taxable income.
Most of the gain falls in the 15% long-term bracket, so the estimated federal tax is about $4,500, leaving roughly $85,500 in after-tax proceeds. By contrast, a short-term version of the same gain could be taxed at 22%+ — over $6,600.
What are long-term capital gains?
A long-term capital gain is the profit on an investment you held for more than one year before selling. Long-term gains receive preferential federal tax rates of 0%, 15%, or 20% — usually much lower than ordinary income rates. This calculator preselects the long-term holding period so you can estimate the tax on stocks, ETFs, and funds you've held for the long haul.
The 0%, 15%, and 20% federal tiers explained
Your long-term capital gains rate depends on your total taxable income, including the gain itself. For 2024:
- 0% rate: single filers up to about $47,025 of taxable income; married filing jointly up to about $94,050.
- 15% rate: single filers up to about $518,900; married filing jointly up to about $583,750.
- 20% rate: income above those upper thresholds.
Because the gain stacks on top of your ordinary income, part of a large gain can land in more than one tier. The calculator fills each tier in order so your blended rate is realistic.
How to qualify for the 0% rate
If your total taxable income stays under the 0% threshold, the portion of your long-term gain that fits below it is taxed at zero percent federally. This is why some investors deliberately realize gains in low-income years — during a career gap, early retirement before pensions or Social Security begin, or a year with large deductions.
Does the Net Investment Income Tax apply?
Yes — long-term gains can still be subject to the 3.8% Net Investment Income Tax (NIIT) on top of the 15% or 20% rate. NIIT kicks in when your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). Toggle NIIT in the calculator to see the combined estimate. For high earners, the effective long-term rate can reach about 23.8%.
Long-term investing and ETFs
Buy-and-hold investors in broad index ETFs (like those tracking the S&P 500 or total market) typically benefit most from long-term rates. Holding for years not only defers tax until you sell but also qualifies your eventual gain for the lower brackets. Keep in mind that funds may also distribute taxable dividends and capital gains along the way; our dividend calculator can help you project that income.
One year and a day
To qualify as long-term you must hold for more than one year — at least a year and a day. Selling on the exact one-year anniversary is still short-term and taxed as ordinary income. When you're close to the line, our short-term capital gains calculator shows what waiting could save.
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Frequently asked questions
Educational use only — not financial advice
StockLeo is for educational purposes only and does not provide financial, investment, legal, or tax advice. Calculations are estimates and may not reflect your full tax or financial situation. Consult a qualified professional before making financial decisions.