Stock Capital Gains Tax — LTCG/STCG, QSBS §1202, NIIT, Wash Sale (2026)

Quick summary

The Stock Capital Gains Tax Calculator handles every IRS rule for selling US stocks: short-term gains taxed at ordinary income rates (10-37%), long-term gains at preferential 0/15/20% with bracket stacking, the 3.8% NIIT for high earners, and state capital gains tax (0% in 9 states; up to 13.3% in California).

It applies the major OBBBA Section 1202 QSBS upgrade: the per-issuer exclusion cap rose from $10 million to $15 million (10× basis still applies if greater) for stock issued after July 4, 2025. Pre-OBBBA stock retains the $10M cap with 5-year binary holding. Post-OBBBA stock gets a NEW tiered structure: 50% exclusion at 3 years, 75% at 4 years, 100% at 5 years — and the gross asset threshold rose from $50M to $75M.

Use it to model wash sale violations, capital loss harvesting strategies, QSBS exit timing, and NIIT exposure on big stock liquidations.

Holding period

Long-term: 0% / 15% / 20% LTCG. Short-term: ordinary income tax rates.

Filing status

Sale proceeds

Cost basis

Sale commission

Carryover loss (prior years)

Other ordinary income

State capital gains rate

Qualified Small Business Stock (§1202)?

QSBS allows up to $10M or 10× basis exclusion if all §1202 requirements met.

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How to use

1 Enter sale proceeds and original cost basis (purchase price + commissions paid). Sale-side commissions deduct from proceeds.
2 Choose holding period: SHORT-TERM (held ≤1 year, taxed at ordinary rates) or LONG-TERM (>1 year, 0/15/20% LTCG).
3 Enter your filing status and other ordinary income — long-term gains are stacked ABOVE ordinary income to determine which 0/15/20% bracket applies.
4 Toggle QSBS §1202 if your holding qualifies (issued by a C-corp with < $75M assets at issuance, held 5+ years for 100% exclusion). Calculator applies $15M cap or 10× basis.
5 Enter capital loss carryover from prior years and state tax rate. Click Calculate to see federal tax, NIIT 3.8%, state tax, total, and any remaining carryover.

2026 Federal Capital Gains Tax Brackets (Rev. Proc. 2025-32)

Filing Status	0% Rate	15% Rate	20% Rate
Single	$0 — $48,350	$48,351 — $533,400	Over $533,400
MFJ	$0 — $96,700	$96,701 — $600,050	Over $600,050
HoH	$0 — $64,750	$64,751 — $566,700	Over $566,700
MFS	$0 — $48,350	$48,351 — $300,025	Over $300,025

QSBS §1202 — OBBBA Major Upgrade (July 4, 2025)

Qualified Small Business Stock is the most powerful tax tool for startup founders, employees, and angel investors.

Provision	Pre-OBBBA (≤ July 4, 2025)	Post-OBBBA (> July 4, 2025)
Per-issuer exclusion cap	$10 million	$15 million (inflation-indexed 2027+)
10× basis cap (alternative)	10× basis if > $10M	10× basis if > $15M
Holding period structure	Binary 5-year (100% or 0%)	Tiered 50% (3yr) / 75% (4yr) / 100% (5yr)
Non-excluded gain rate	28% special QSBS rate	28% special QSBS rate
Gross asset test (issuance)	$50 million	$75 million
Issuer entity	Domestic C-corp	Same
Industry exclusions	Banking, insurance, professional services, hotels, restaurants, farming, mining	Same

Wash Sale Rule (IRC §1091)

If you sell a security at a loss and buy a "substantially identical" security within 30 days BEFORE or AFTER, the loss is DISALLOWED — added to the basis of the replacement security instead. Common traps:

Triggers Wash Sale	Doesn't Trigger Wash Sale
Sell AAPL, buy AAPL within 30 days	Sell AAPL, buy MSFT (different company)
Sell AAPL, buy AAPL options/calls	Sell AAPL, wait 31 days, buy AAPL
Sell AAPL, spouse's account buys AAPL	Sell SP500 ETF, buy Russell 2000 ETF
Sell AAPL, IRA buys AAPL	Crypto-to-crypto (NOT covered by §1091)

Capital Loss Carryover Rules

Net capital losses offset gains DOLLAR-FOR-DOLLAR. Excess loss can offset ordinary income up to $3,000/year ($1,500 MFS). Remainder carries forward INDEFINITELY until used or you die. ST losses offset ST gains first; LT losses offset LT gains first; net LT losses can also offset ST gains.

Tax-Loss Harvesting Strategy

Step	Detail
Identify losers	Sell positions with unrealized losses by Dec 31
Avoid wash sale	Don't buy identical security within 30 days (before or after)
Replace exposure	Buy similar but not identical (e.g., SP500 ETF → Russell 1000 ETF)
Offset gains	Use harvested losses against current and future gains
$3,000/yr ordinary offset	Each year, deduct $3,000 of net loss against W-2 income

FAQ

Q How are stock capital gains taxed in 2026?

Long-term gains (held >1 year): 0/15/20% federal LTCG rates depending on total income. Short-term (held ≤1 year): ordinary rates 10-37%. Plus 3.8% NIIT for high earners (MAGI > $200K single / $250K MFJ). State tax 0-13% additional.

Q What is QSBS and the OBBBA upgrade?

Qualified Small Business Stock under IRC §1202. OBBBA (July 4, 2025) raised the per-issuer exclusion from $10M to $15M, added a tiered holding (50%/75%/100% at 3/4/5 years), and raised the gross asset threshold from $50M to $75M. For founders, this is one of the biggest tax wins in US history.

Q How does the wash sale rule work?

IRC §1091: if you sell a security at a loss and buy a substantially identical one within 30 days BEFORE or AFTER, the loss is disallowed — added to the basis of the replacement security. Applies to spouse's and IRA accounts. Does NOT apply to cryptocurrency (a major loophole in 2026).

Q Can I deduct stock losses against W-2 income?

Yes — up to $3,000/year ($1,500 MFS) of net capital loss can offset ordinary income (W-2, business). The rest carries forward indefinitely. Combined with no wash sale on crypto and selective tax-loss harvesting, this is the most consistent annual tax shelter for investors.

Q What is tax-loss harvesting?

Selling losing positions to realize losses, then offsetting current/future gains and up to $3,000/yr ordinary income. Replace with a SIMILAR but NOT IDENTICAL security to maintain market exposure. Most beneficial December 1-31 each year. Robo-advisors automate this systematically.

Q How is NIIT calculated on stock gains?

NIIT is 3.8% × the LESSER of (a) net investment income or (b) MAGI over threshold ($200K single / $250K MFJ). It's an ADDITIONAL tax on top of LTCG/STCG. Frozen since 2013, no inflation adjustment, captures more taxpayers each year as wages rise.

Q What is the 0% capital gains rate?

Long-term capital gains are TAX-FREE federally (0% rate) if total taxable income (other income + the gain itself stacked on top) stays under $48,350 single / $96,700 MFJ in 2026. Major retirement-planning opportunity — sell appreciated stock in low-income years (sabbatical, retirement gap before SS/RMDs).

Q Should I report stock gains every year?

Yes — Form 8949 + Schedule D required for every disposition that triggers gain/loss. Brokerages issue Form 1099-B. Match the figures exactly; mismatches trigger CP2000 notices. Use specific identification to choose exact lots when selling — minimizes current-year gain.