Capital Gains Tax Guide: Short vs Long Term (Free Calculator)
How holding period, cost basis, and tax bracket change US capital gains on stocks, crypto, and RSU sales.
US capital gains tax depends on how long you held the asset, your taxable income, and whether the gain is short-term or long-term. This guide pairs with the free capital gains tax calculator on Fynvorax—enter proceeds, cost basis, and holding period to estimate federal tax before you sell stocks, ETFs, crypto, or other property.
Not tax advice State tax, Net Investment Income Tax (NIIT), wash-sale rules, and carryforward losses can change your bill. Use this as a planning estimate and confirm with a licensed preparer.
Short-term vs long-term (federal)
Short-term: sold one year or less after purchase—generally taxed at ordinary income rates (10%–37% brackets). Long-term: held more than one year—often 0%, 15%, or 20% depending on taxable income. The holding period clock starts the day after you acquire the asset.
Cost basis basics
Basis usually equals purchase price plus buy-side commissions. RSU shares use FMV included in W-2 at vest as basis. Inherited assets may receive step-up basis. Gifted assets carry over the donor's basis in many cases—special rules apply.
Example scenarios
Sell $25,000 of stock with $14,000 basis after 18 months → $11,000 long-term gain.
Flip crypto held 6 months → short-term gain at ordinary rates.
Sell RSU shares immediately after vest → often small capital gain/loss; vest FMV was already ordinary income.
Loss harvesting
Capital losses offset gains in the same year. Up to $3,000 of excess loss can reduce ordinary income annually with carryforward. Wash-sale rules block deducting a loss if you repurchase a substantially identical security within 30 days—plan trades before year-end.
Stacking with RSU, ISO, and crypto
Equity comp and crypto can produce both ordinary income events (vest, exercise, staking) and separate capital gain on later sale. Model each layer: RSU vest on W-2, then capital gain calculator for disposal. Crypto disposals may be short-term even when you hold other coins long-term—track lots per asset.
State tax and NIIT
Federal long-term rates are only part of the bill. California, New York, New Jersey, and other states tax capital gains as ordinary income or at preferential rates with their own brackets. High earners may owe Net Investment Income Tax (3.8%) on investment income above IRS thresholds—stack state + NIIT on top of federal when you sell a large position in one year.
Tax lot methods (FIFO vs specific ID)
Brokers default to FIFO (first-in, first-out) unless you elect specific identification before the sale settles. Specific ID lets you sell higher-basis lots first to minimize gain—useful after multiple buys during a dip. Crypto exchanges vary; export transaction history before year-end so your preparer can reconcile Form 8949.
Real-world sale scenarios
Employee sells vested RSU shares 13 months after vest: long-term gain on appreciation only; vest FMV was already wages.
Day trader flips shares within 30 days: short-term gain at marginal rate; watch wash-sale if repurchasing.
Investor harvests $8,000 loss in December to offset $8,000 gain from an earlier sale—no carryforward needed that year.
Home sale: primary residence may exclude up to $250k/$500k gain—this calculator focuses on securities and property outside that exclusion.
Checklist before you sell
Confirm purchase dates for each tax lot (FIFO vs specific ID).
Include fees in basis and subtract from proceeds where applicable.
Estimate state tax if you live in CA, NY, or other high-tax states.
Check if NIIT applies (modified AGI thresholds for high earners).