Estimate your 2025 capital gains tax on investments. Compare short-term vs. long-term rates and see how holding period affects your tax bill.
The IRS taxes capital gains at different rates depending on how long you held the investment. Assets held for more than one year qualify for preferential long-term rates.
Key strategies: (1) Hold investments over 1 year for lower long-term rates; (2) Tax-loss harvesting — sell losing positions to offset gains; (3) Donate appreciated assets to charity to avoid capital gains entirely; (4) Use tax-advantaged accounts (IRA, 401k) for high-growth investments; (5) Time sales in low-income years when you may qualify for the 0% rate.
If you've lived in your home for at least 2 of the past 5 years, you can exclude up to $250,000 of gain ($500,000 for married couples). Gains above these thresholds are taxed at long-term rates if you owned the home for more than a year.
The NIIT is an additional 3.8% tax on investment income (including capital gains) for high earners. It applies to the lesser of (a) your net investment income or (b) the amount your modified AGI exceeds $200,000 (single) or $250,000 (married). So effective long-term rates can be 0%, 15%, 18.8%, 20%, or 23.8%.