by Nicholas Hamner
Investment Advisor Representative
[email protected]
Capital gains describe the increase in value an investor receives when they sell an asset for more than they paid. If you buy $400 worth of stock and sell it for $500, you’ve realized $100 in capital gains. There are capital losses, too, but let’s start with the gains.
There are two types of capital gains. Short-term gains are a gain realized on an asset held for less than one year. Then there are long-term gains, which are realized on an asset held longer than one year.
Why the distinction between short-term and long-term capital gains? Because they are taxed differently. Short-term gains are taxed just like any other ordinary income, like your paycheck. Long-term capital gains are taxed at lower rates, appropriately called the capital gains rates.
Here is what the capital gains rates will look like for 2026:
| Tax Bracket Rate | Single | Married Filing Jointly | Head of Household |
| 0% | $0 – $49,450 | $0 – $98,900 | $0 – $66,200 |
| 15% | $49,451 – $545,500 | $98,901 – $613,700 | $66,201 – $579,600 |
| 20% | $545,500+ | $613,700+ | $579,601+ |
While none of this should be considered tax advice—we’re presenting this as information only—if you’re a high-earner, you should note that you could be subject to an additional tax on top of this. Anyone with an adjusted gross income in excess of $200,000 (single filers or heads of household) or a couple with an adjusted gross income above $250,000 (joint filers) may be subject to an additional 3.8% tax as a net investment income tax. Also, keep in mind that the long-term capital gains rate for collectibles and precious metals remains at a maximum of 28%.
Capital losses—if an investor buys an asset and sells it for less than they paid—may be used to offset capital gains. If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other kinds of income. Should you have more than $3,000 in such capital losses, you may be able to carry the losses forward. You can continue to carry forward these losses until such time that future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only on death. Again, do not act on any of the information you read here as if it is advice. This is information only.
Finally, for some assets, the calculation of a capital gain or loss may not be as simple and straightforward as it sounds. As with any matter dealing with taxes, individuals are encouraged to seek the counsel of a tax professional before making any tax-related decisions.