Here you'll find a capital gains tax calculator, where you can model the cost to sell or hold on to an investment until you have favorable long-term capital gains.
Enter your investment information and tax treatment, and the tool will show you the difference between short and long-term capital gains – numerically and visually.
Capital Gains Tax Calculator
Using the Capital Gains Tax Calculator
In the United States, the IRS defines two types of capital gains for most investments (visit the link for details):
- Short Term Capital Gains: Investments held for exactly one year or shorter
- Long Term Capital Gains: Investments held for a year and a day or longer
Why bother holding longer? Favored tax treatment.
Federal taxes – and most states and localities which tax investments – give favored treatments for long term capital gains. These differing tax treatments are meant to bias investors towards longer holding periods by charging fewer taxes on these longer investments.
Capital Gains Tax Calculator Inputs
To run the tool, enter your investment and tax information:
- Purchase Price/Cost Basis: Enter the amount you added to the investment, either at purchase or as your final cost basis.
- Sale Price: What would the total value of the investment be at sale?
- Commission: What commission or payment would you need to make to dispose of the asset.
- Federal Marginal Tax Rate: What tax would you pay on a short term investment at the federal level.
- Federal Long-Term Capital Gains Rate: What tax would you pay on a long term investment at the federal level.
- State & Local Marginal Tax Rate: What tax would you pay on a short term investment at the state (and optionally, local) level.
- State & Local Long-Term Capital Gains Rate: What tax would you pay on a long term investment at the state (and optionally, local) level.
When happy with your inputs, hit the blue 'Compute Capital Gains' button.
Capital Gains Tax Tool Tool Outputs
- Capital Gain Type: The tool runs both "Short Term" and "Long Term" capital gains scenarios at once; follow the column to see details for a scenario.
- Commission Paid: A reminder of the amount paid in commission to sell an asset.
- Tax Owed: The total Federal (plus State and possibly Local) taxes owed to sell the asset.
- Gain After Tax: The market gain remaining after you pay taxes on an asset sale.
- Net After Sale: The total amount you'd realize if you liquidate the investment and pay commissions and taxes.
You'll also see a graph appear. On the left side, you'll see where the money goes in a short-term capital gains scenario. On the right, you'll see the same for long-term capital gains.
On desktop, hover to see how individual components affect your final payout. On mobile or tablet, click the graph to see the components.
Additionally, you can export the data using the 'hamburger' menu in the upper right. Export to a chart by selecting 'svg' or 'png'. Alternatively, export to 'csv' to play with the data in your favorite spreadsheet program.
See Tax Treatment in the Capital Gains Tax Calculator
You shouldn't let tax considerations completely control your investment strategy – but you need to recognize taxes make a huge difference in your gains. Sometimes waiting a short period for long term capital gain treatment is worth the risk of staying in the market.
Now: that's not investment advice. Even one day can theoretically tank an investment, of course. You do need to consider risk vs. reward, and sometimes LTCG suggests you roll the dice.
Here are some investment calculators to get a feel for investment returns:
