Long Term Capital Gains Tax Calculator
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Long Term Capital Gains Tax Calculator
Please enter your details to calculate your tax.
Understanding Long Term Capital Gains Tax
Long-term capital gains tax is the tax you pay on profits from selling an asset (like stocks, bonds, real estate, or collectibles) that you've owned for more than one year. This is distinct from short-term capital gains, which apply to assets held for one year or less and are typically taxed at your ordinary income tax rate. Long-term capital gains generally benefit from lower tax rates, making them more favorable for investors.
The calculation involves determining your taxable capital gain and then applying the appropriate long-term capital gains tax rate based on your income and filing status.
How to Calculate Long Term Capital Gains Tax:
-
Determine Your Capital Gain: This is the difference between the sale price of your asset and its cost basis. The cost basis usually includes the original purchase price plus any costs associated with acquiring or improving the asset (e.g., commissions, fees, renovations).
Capital Gain = Sale Price - Cost Basis
-
Identify Long-Term Status: Ensure the asset was held for more than one year before being sold. If held for one year or less, it's a short-term capital gain and taxed differently.
-
Determine Your Income and Filing Status: Your Adjusted Gross Income (AGI) and your tax filing status (e.g., Single, Married Filing Jointly) are crucial for determining which tax bracket you fall into for long-term capital gains.
-
Apply the Correct Tax Rate: For long-term capital gains, the IRS uses specific rates (0%, 15%, or 20%) based on taxable income. The income thresholds for these rates change annually and depend on your filing status.
- 0% Rate: Applies to taxpayers in the lower income brackets.
- 15% Rate: Applies to taxpayers in the middle income brackets.
- 20% Rate: Applies to taxpayers in the highest income brackets.
Note: Special rates may apply to certain assets like collectibles (up to 28%) or unrecaptured Section 1250 gain from depreciable real estate (up to 25%). This calculator focuses on the standard 0%, 15%, and 20% rates for qualified assets.
-
Calculate the Tax: Multiply your total taxable long-term capital gain by the applicable tax rate.
Capital Gains Tax = Taxable Capital Gain × Applicable Tax Rate
Example Calculation:
Let's say you sold shares of stock you held for three years.
- Sale Price: $75,000
- Cost Basis: $30,000
- Capital Gain: $75,000 – $30,000 = $45,000
- Tax Year: 2024
- Adjusted Gross Income (AGI): $90,000
- Filing Status: Single
For the 2024 tax year, the long-term capital gains tax brackets for a single filer are approximately:
- 0% up to $47,025
- 15% from $47,025 to $518,900
- 20% above $518,900
Since your AGI is $90,000, your capital gain of $45,000 falls within the 0% bracket for the portion of your income up to $47,025. Therefore, the tax on this $45,000 gain would be $0.
If your AGI was $150,000 and your capital gain was $60,000:
- The first $47,025 of gain would be taxed at 0% = $0.
- The remaining $12,975 ($60,000 – $47,025) would be taxed at 15% = $1,946.25.
Total tax would be $1,946.25.
Disclaimer: This calculator and information are for educational purposes only and do not constitute financial or tax advice. Tax laws are complex and subject to change. Consult with a qualified tax professional for personalized advice regarding your specific situation. The tax bracket thresholds used in this calculator are based on current IRS guidelines for the selected tax year and may not be perfectly precise for all situations or future years.
function calculateCapitalGainsTax() {
var salePrice = parseFloat(document.getElementById("salePrice").value);
var costBasis = parseFloat(document.getElementById("costBasis").value);
var taxYear = parseInt(document.getElementById("taxYear").value);
var incomeLevel = parseFloat(document.getElementById("incomeLevel").value);
var filingStatus = document.getElementById("filingStatus").value;
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = 'Please enter your details to calculate your tax.';
resultDiv.style.backgroundColor = "#f8f9fa";
resultDiv.style.color = "var(–text-color)";
if (isNaN(salePrice) || isNaN(costBasis) || isNaN(incomeLevel) || salePrice <= 0 || costBasis <= 0 || incomeLevel < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for Sale Price, Cost Basis, and a non-negative number for Income.";
return;
}
var capitalGain = salePrice – costBasis;
if (capitalGain < 0) {
resultDiv.innerHTML = "Capital Gain cannot be negative (Sale Price < Cost Basis).";
return;
}
var taxRate = 0;
var taxableIncomeForBrackets = incomeLevel; // This is a simplification; actual taxable income is more complex.
// For this calculator, we use AGI to approximate bracket placement.
// Define 2023 and 2024 long-term capital gains tax bracket thresholds
// These are approximations and can vary slightly year to year.
// Source: IRS publications (e.g., Pub 17) and reputable tax sites.
var brackets = {
2023: {
single: { zero: 44625, fifteen: 44626, top: 44625 },
married_jointly: { zero: 89250, fifteen: 89251, top: 89250 },
head_household: { zero: 59750, fifteen: 59751, top: 59750 },
married_separately: { zero: 44625, fifteen: 44626, top: 44625 }
},
2024: { // Projections/Estimates, actual IRS numbers may differ slightly
single: { zero: 47025, fifteen: 47026, top: 518900 },
married_jointly: { zero: 94050, fifteen: 94051, top: 1037800 },
head_household: { zero: 70550, fifteen: 70551, top: 518900 },
married_separately: { zero: 47025, fifteen: 47026, top: 518900 }
}
};
var yearBrackets = brackets[taxYear];
if (!yearBrackets) {
resultDiv.innerHTML = "Tax year not supported or thresholds not defined.";
return;
}
var filingStatusBrackets = yearBrackets[filingStatus];
if (!filingStatusBrackets) {
resultDiv.innerHTML = "Filing status not supported for this tax year.";
return;
}
var zeroRateEnd = filingStatusBrackets.zero;
var fifteenRateEnd = filingStatusBrackets.fifteen;
var twentyRateStart = filingStatusBrackets.top;
var taxAmount = 0;
// Simplified logic: Assume AGI determines the bracket.
// In reality, taxable income = AGI – deductions.
// We'll use AGI to *estimate* bracket placement for simplicity.
if (taxableIncomeForBrackets zeroRateEnd && taxableIncomeForBrackets < twentyRateStart) {
// Gain might fall into 15% bracket
// If the gain itself pushes income into the 15% bracket
// This is a common simplification: if total income is above the 0% bracket but below the 20% bracket, the gain is taxed at 15%.
// More accurately, one would determine the "taxable income" after deductions.
// For this calculator, we assume if incomeLevel is in the 15% range, the gain is taxed at 15%.
if (incomeLevel = twentyRateStart
// Gain falls into 20% bracket
taxRate = 20;
taxAmount = capitalGain * 0.20;
}
// Refined logic based on common tax bracket application:
// If your *taxable income* (not AGI directly, but AGI less deductions) puts you in a bracket,
// the capital gain is taxed at that bracket's rate, but only up to the bracket's ceiling.
// Let's refine based on the *total* income (AGI + Capital Gain) for simplicity,
// though this is still an approximation as deductions are not factored in.
var effectiveTaxableIncome = incomeLevel + capitalGain;
var calculatedTaxRate = 0;
var calculatedTaxAmount = 0;
var currentYearBrackets = brackets[taxYear][filingStatus];
var zeroThreshold = currentYearBrackets.zero;
var fifteenThreshold = currentYearBrackets.fifteen; // This is the start of the 15% bracket
var twentyThreshold = currentYearBrackets.top; // This is the start of the 20% bracket
if (effectiveTaxableIncome <= zeroThreshold) {
calculatedTaxRate = 0;
calculatedTaxAmount = 0;
} else if (effectiveTaxableIncome 0) calculatedTaxRate = 15; else calculatedTaxRate = 0;
} else if (effectiveTaxableIncome 0) {
var incomeAtFifteenStart = incomeLevel + gainInZeroBracket;
if (incomeAtFifteenStart 0) calculatedTaxRate = 20;
else if (gainInFifteenBracket > 0) calculatedTaxRate = 15;
else calculatedTaxRate = 0; // Should not happen if effectiveTaxableIncome > fifteenThreshold
} else { // effectiveTaxableIncome > twentyThreshold
// All gain taxed at 20%
calculatedTaxRate = 20;
calculatedTaxAmount = capitalGain * 0.20;
}
// Recalculate more accurately:
// var T = Taxable Income (AGI – Deductions). For simplicity, we use AGI itself.
// We need to calculate the tax on (AGI + CapitalGain) and subtract the tax on AGI.
// This requires knowing deduction amounts, which we don't have.
// Alternative simpler approach: apply rates based on AGI income for simplicity.
// If AGI is in 0% range, gain is 0%.
// If AGI is in 15% range, gain is 15%.
// If AGI is in 20% range, gain is 20%.
var finalTaxRate = 0;
var taxOnGain = 0;
var currentYearBracketsForStatus = brackets[taxYear][filingStatus];
var zeroEnd = currentYearBracketsForStatus.zero;
var fifteenStart = currentYearBracketsForStatus.fifteen;
var twentyStart = currentYearBracketsForStatus.top;
if (incomeLevel 0) finalTaxRate = 15; else finalTaxRate = 0;
} else if (incomeLevel 0) finalTaxRate = 20; else finalTaxRate = 15;
} else { // incomeLevel >= twentyStart
// If AGI is already in the 20% bracket, the entire gain is taxed at 20%.
finalTaxRate = 20;
taxOnGain = capitalGain * 0.20;
}
// Special check for collectibles (max 28%) and Section 1250 gain (max 25%)
// This calculator does not differentiate asset types, so it assumes standard long-term rates.
resultDiv.innerHTML = `Estimated Long Term Capital Gains Tax: $${taxOnGain.toFixed(2)}
Tax Rate Applied: ${finalTaxRate}%`;
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