Capital Gains Tax Rates for 2024: Short-Term vs Long-Term
Short-term capital gains (assets held one year or less) are taxed at your ordinary income tax rate, which ranges from 10% to 37% for 2024. Long-term capital gains (assets held longer than one year) are taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income and filing status. The majority of taxpayers fall into the 15% long-term rate.
Capital gains apply to the sale of stocks, bonds, mutual funds, real estate, cryptocurrency, and other investment assets. The difference between your selling price and your cost basis (purchase price plus transaction costs) determines the gain or loss.
Long-Term Capital Gains Tax Brackets (2024)
| Tax Rate | Single Filers | Married Filing Jointly |
|---|---|---|
| 0% | Up to $47,025 | Up to $94,050 |
| 15% | $47,026 to $518,900 | $94,051 to $583,750 |
| 20% | Over $518,900 | Over $583,750 |
Short-Term Capital Gains
Short-term capital gains receive no preferential rate — they are added to your ordinary income and taxed at your marginal federal rate. For 2024, the ordinary income brackets range from 10% (up to $11,600 for single filers) to 37% (over $609,350). This means a day trader in the 32% tax bracket pays 32% on short-term gains, compared to just 15% on long-term gains from the same investment.
Practical Examples
Example 1: A single filer with $60,000 in taxable income sells stock held for 18 months with a $10,000 long-term gain. Their taxable income including the gain is $70,000. Since the gain falls within the 15% bracket ($47,026-$518,900), they owe $1,500 in capital gains tax.
Example 2: The same filer sells stock held for 8 months with a $10,000 short-term gain. This gain is taxed as ordinary income. At a marginal rate of 22% (the bracket for $44,726-$95,375 in 2024), they owe $2,200 — $700 more than the long-term rate.
Example 3: A married couple filing jointly with $80,000 in taxable income sells investments with a $12,000 long-term gain. Their combined taxable income is $92,000, which falls entirely within the 0% bracket (up to $94,050 for MFJ). They owe $0 in capital gains tax.
Try It Yourself
Enter your income, filing status, and investment details to see exactly how much you would owe in capital gains tax.
Open Capital Gains Tax CalculatorFrequently Asked Questions
How do I determine if a gain is short-term or long-term?
The holding period determines the classification. If you held the asset for one year or less before selling, the gain is short-term. If you held it for more than one year (at least one year and one day), it is long-term. The holding period starts the day after you acquire the asset and ends on the day you sell it. For inherited assets, gains are generally treated as long-term regardless of how long you or the decedent held the property.
What is the Net Investment Income Tax (NIIT)?
The Net Investment Income Tax adds an extra 3.8% on investment income (including capital gains, dividends, and interest) for taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly). This means high-income investors effectively pay 23.8% on long-term capital gains (20% + 3.8% NIIT). The NIIT 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 offset capital gains dollar for dollar. Short-term losses first offset short-term gains, and long-term losses first offset long-term gains. Any remaining net loss can offset the other type. If your total losses exceed total gains, you can deduct up to $3,000 of net capital loss against ordinary income per year ($1,500 if married filing separately). Unused losses carry forward indefinitely to future tax years.
Are there any capital gains exclusions for selling a home?
Yes. If you sell your primary residence and meet the ownership and use tests (owned and lived in the home for at least 2 of the last 5 years), you can exclude up to $250,000 of capital gains (single) or $500,000 (married filing jointly) from taxation. This exclusion can be used once every two years. Any gain above the exclusion amount is taxed at the applicable capital gains rate.