Capital Gains
Understanding Capital Gains
Enjoy resources tailored to the intrepid investor.
Overview
Understanding capital gains
We pride ourselves on providing clear, concise information.
Long-term vs. short-term gains
Short-term capital gains are taxed at ordinary income tax rates. The long-term capital gains tax rate is 0%, 15% or 20%.
Rules for capital losses
Capital losses may be used to offset capital gains. Any remaining capital losses above that can be carried forward to potentially offset capital gains in following years.
Tax-loss harvesting
You may deduct up to $3,000 of capital losses in excess of capital gains for your federal tax return each year. State tax rates vary.
What works for you?
Your personal circumstances and financial situation will play a role in how you approach your taxes.
Calculator
Capital gains estimator
Taxes should not drive investment decisions, but understanding the tax consequences of selling an investment can provide some much-needed insight. Use this calculator to better understand the difference between short-term and long-term gains and to get an idea of what you might owe. Also, don't forget that state taxes may be due as well.
Estimated federal tax
$26,300
Capital gain
$150,000
Net investment income tax
$3,800
Net proceeds after federal tax
$223,700
Effective rate on the gain
17.5%
Your options
How we manage gains
Harvest losses year-round
We look for opportunities to realize losses as they appear rather than in a December scramble.
Locate assets thoughtfully
Holding the right assets in the right account types can reduce the tax drag on the same portfolio.
Plan concentrated positions
Low-basis stock and option exercises are unwound on a schedule that manages both risk and tax.
Give strategically
Appreciated securities can often do more good — and cost less in tax — than a cash gift.
This calculator is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals if you have specific questions about long- and short-term capital gains.