2025 capital gains tax brackets, and what actually counts as long-term

For 2025, the 0% long-term capital gains rate applies to taxable income up to $48,350 for a single filer, $96,700 for a married couple filing jointly, and $64,750 for head of household — above that, 15%, then 20% past a second, higher threshold. Short-term gains, from an asset held one year or less, get none of this: they are taxed as ordinary income at the same rates as a paycheck, up to 37%. Which schedule applies is decided entirely by a holding period, never by the size of the gain.

The 2025 long-term capital gains brackets

Long-term gains — from an asset held more than one year before it is sold — are taxed at 0%, 15% or 20%, based on total taxable income including the gain itself:

These are the same three rates that have applied since 2013 — only the dollar thresholds move each year, adjusted for inflation under Revenue Procedure 2024-40. The table uses taxable income, not gross income — the figure left after your standard deduction or itemized deductions — and that figure includes the gain itself, not just wages or other ordinary income.

Gains stack on top of ordinary income, not beside it

A long-term gain does not get its own, separate income ladder starting at zero. It is added on top of whatever ordinary taxable income you already have, and only the portion of the combined total that falls above each threshold is taxed at that threshold's rate. A retiree with little other income can realize a substantial gain at 0%; an earner already well into the 22% ordinary bracket has no room left in the 0% capital gains band at all, and every dollar of gain starts at 15%. The gain does not change which ordinary bracket your wages fall into, either — the two ladders interact only through where each one starts counting.

Short-term gains use a completely different schedule

Sell an asset one year or less after buying it and the entire gain is short-term, taxed as ordinary income alongside wages, interest and everything else — 10% up to 37%, with no 0% or 15% option available at all. The holding period is counted from the day after purchase through the day of sale; a single day on the wrong side of the one-year mark moves a gain from one schedule to the other, with no partial credit for being close. There is no dollar-amount exception — a small short-term gain gets no more favorable treatment than a large one.

The same rule applies in reverse to losses. A short-term loss first offsets short-term gains, and a long-term loss first offsets long-term gains, before either type is allowed to offset the other kind or, beyond that, up to $3,000 of ordinary income per year — $1,500 if married filing separately — with any excess carried forward to future years, confirmed on the IRS's capital gains and losses topic page. Because the two categories are kept separate until that final netting step, the character of a loss — short-term or long-term — is worth tracking with the same care as the character of a gain.

What the difference is worth on a real gain

Take a single filer with $40,000 of ordinary taxable income from wages, already net of the standard deduction, who also realizes a $15,000 gain:

The $15,000 gain lands partly in the 0% band and partly in the 15% band because it stacks on top of $40,000 of wages, against a 0% ceiling of $48,350 — $8,350 of room remains before the 15% rate takes over. As ordinary income, the identical dollar amount instead stacks against the 12% and 22% wage brackets, since the 12% band for a single filer ends at $48,475. Same taxpayer, same gain, $1,455 more tax owed purely because of how long the asset was held before selling. The stock profit calculator works out the raw dollar gain on a trade after fees, which is the figure this holding-period schedule then applies to.

A separate 3.8% surtax that inflation never touches

Above certain income levels, a further 3.8% Net Investment Income Tax applies on top of the capital gains rate, on the lesser of net investment income or the amount modified adjusted gross income exceeds a threshold: $200,000 for a single filer or head of household, $250,000 for a married couple filing jointly, and $125,000 for married filing separately. Unlike every other figure in this article, these thresholds are fixed by statute rather than adjusted for inflation — they have not moved since the tax took effect in 2013, confirmed on the IRS's Net Investment Income Tax page. A large gain that pushes income above these lines can face a combined federal rate of 23.8% even while sitting inside the "15%" capital gains bracket on paper.

What to check before assuming a rate applies

• Confirm the holding period precisely — exactly one year or less is short-term; one year and a day or more is long-term. Trade confirmations from a broker usually show the acquisition date needed to check this.
• Check your cost basis, including reinvested dividends and any prior stock splits, since the taxable gain is the sale price minus basis, not the sale price alone.
• Watch for the wash sale rule if you are harvesting a loss elsewhere: repurchasing a substantially identical security within 30 days disallows the loss for tax purposes.
• State tax treatment of capital gains varies widely and is separate from everything above — some states tax gains as ordinary income with no preferential rate at all.

Sources

• IRS: Revenue Procedure 2024-40
• IRS: Net Investment Income Tax
• IRS: Topic no. 409, Capital gains and losses

This is general information, not tax or investment advice. It covers federal capital gains rates only; state tax, the Net Investment Income Tax, and your specific cost basis and holding period can change the result substantially. For a decision about a specific sale, consult a licensed tax preparer.