Short-Term Capital Gains Tax Rate
Long-Term Capital Gains Tax Rate
Short-Term Capital Gains: Taxed at your ordinary income tax rate.
Long-Term Capital Gains: Taxed at preferential rates (0%, 15%, or 20% federally in 2023/2024, depending on income bracket).
This calculator uses a placeholder rate for long-term gains. Adjust based on your income bracket.
Your estimated Capital Gains Tax is: $0.00
Understanding Capital Gains Tax
Capital gains tax is a tax levied on the profit made from selling an asset that has appreciated in value. This asset could be anything from stocks and bonds to real estate or even collectibles. The profit, or "gain," is calculated as the difference between the selling price and your "cost basis."
Key Terms Explained:
Purchase Price: The original amount you paid for the asset.
Selling Price: The amount you received when you sold the asset.
Cost Basis: This is typically your purchase price, but it can be adjusted for certain expenses.
Associated Expenses: These are costs incurred directly related to buying or selling the asset. For selling, this can include real estate commissions, legal fees, or closing costs. For buying, it might include settlement fees or title insurance. These expenses are added to your purchase price to determine your total cost basis.
Capital Gain/Loss: The difference between your net selling price (selling price minus selling expenses) and your total cost basis (purchase price plus purchase expenses).
Holding Period: The length of time you owned the asset. This is crucial as it determines whether your gain is classified as short-term or long-term.
Calculating Your Capital Gain:
The fundamental formula is:
Capital Gain = (Selling Price - Selling Expenses) - (Purchase Price + Purchase Expenses)
If the result is positive, it's a capital gain. If it's negative, it's a capital loss, which can often be used to offset capital gains or even ordinary income.
Short-Term vs. Long-Term Capital Gains:
Short-Term Capital Gains: If you held the asset for one year or less, any profit is considered a short-term capital gain. These gains are generally taxed at your ordinary income tax rate, which can be significantly higher than long-term rates.
Long-Term Capital Gains: If you held the asset for more than one year, any profit is a long-term capital gain. These are typically taxed at lower, preferential rates. The specific long-term capital gains tax rates (0%, 15%, or 20% federally for most assets in recent years) depend on your overall taxable income.
How the Calculator Works:
Enter your asset's Purchase Price.
Enter the Selling Price you received.
Add any Associated Expenses (e.g., commissions, fees, closing costs). These reduce your taxable gain.
Specify the Asset Holding Period in years. This helps understand if it's a short or long-term gain, though the tax rate input is what the calculation uses.
Select whether you're applying a Short-Term or Long-Term tax rate type (this is a guideline; you input the specific rate).
Enter the applicable Capital Gains Tax Rate as a percentage (e.g., enter 15 for 15%).
Click "Calculate Tax". The calculator will determine the taxable gain and apply your entered tax rate to estimate the tax liability.
Important Considerations:
Tax laws are complex and can change. This calculator provides an estimate based on the inputs provided and general tax principles.
State taxes may also apply. This calculator does not include state-specific capital gains taxes.
Consult with a qualified tax professional for personalized advice regarding your specific financial situation.
function calculateCapitalGains() {
var purchasePrice = parseFloat(document.getElementById("purchasePrice").value);
var sellingPrice = parseFloat(document.getElementById("sellingPrice").value);
var expenses = parseFloat(document.getElementById("expenses").value);
var holdingPeriod = parseFloat(document.getElementById("holdingPeriod").value);
var taxRateType = document.getElementById("taxRateType").value;
var capitalGainsRate = parseFloat(document.getElementById("capitalGainsRate").value);
var resultElement = document.getElementById("result");
var resultSpan = resultElement.querySelector("span");
// Input validation
if (isNaN(purchasePrice) || isNaN(sellingPrice) || isNaN(expenses) || isNaN(capitalGainsRate) || purchasePrice < 0 || sellingPrice < 0 || expenses < 0 || capitalGainsRate 0) {
// Ensure the entered rate is treated as a percentage
var rateDecimal = capitalGainsRate / 100;
estimatedTax = capitalGain * rateDecimal;
// Format the numbers for display
var formattedGain = capitalGain.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedTax = estimatedTax.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
displayText = "Your estimated Capital Gains Tax is: $" + formattedTax + " (Taxable Gain: $" + formattedGain + ")";
resultSpan.style.color = "#28a745"; // Green for success
} else {
var formattedLoss = Math.abs(capitalGain).toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
displayText = "You have a capital loss of: $" + formattedLoss + ". No tax is due.";
resultSpan.style.color = "#17a2b8"; // Blue for informational
}
resultElement.innerHTML = displayText;
}