Free short-term vs long-term capital gains comparison calculator. See how holding period affects tax rate and keep more of your investment profits.
The Short-Term vs Long-Term Capital Gains Calculator compares the tax impact of selling an asset now (short-term) versus holding it past the one-year mark (long-term). See the difference in tax rate, tax owed, and after-tax proceeds side by side.
Short-term capital gains are taxed at your ordinary income rate — potentially up to 37%. Long-term capital gains benefit from preferential rates of 0%, 15%, or 20%. The difference can save thousands of dollars on a single transaction.
Use this calculator before making sell decisions to see exactly how much the holding period matters for your specific income level and filing status. For high-income investors, the difference between short-term and long-term rates can exceed 17 percentage points, meaning patience alone can dramatically increase after-tax returns. This holding-period awareness is especially important during portfolio rebalancing, year-end tax planning, and when considering whether to sell an appreciated position. Armed with the exact dollar difference, you can make confident decisions about when to sell and when to hold.
The tax difference between short-term and long-term rates can be dramatic. On a $50,000 gain, a taxpayer in the 24% bracket would owe $12,000 in short-term tax but only $7,500 at the 15% long-term rate — a $4,500 savings. This calculator quantifies that decision. Seeing the exact dollar difference for your situation makes the case for patience when it matters and urgency when it does not.
Short-Term Tax = Gain × Marginal Ordinary Income Rate Long-Term Tax = Gain × LTCG Rate (0%, 15%, or 20%) Tax Savings = Short-Term Tax – Long-Term Tax After-Tax Gain (ST) = Gain – Short-Term Tax After-Tax Gain (LT) = Gain – Long-Term Tax
Result: ST tax: $8,800 (22%) | LT tax: $6,000 (15%) | Savings: $2,800
A $40,000 gain as a single filer with $75,000 in ordinary income. Short-term: taxed at the 22% marginal rate = $8,800. Long-term: taxed at 15% = $6,000. By holding past one year, you save $2,800 in taxes.
The gap between short-term and long-term rates varies by income level. For lower-income taxpayers in the 10–12% brackets, the gap is smaller (12% vs 0%). For mid-to-high earners, the gap can be as large as 17 percentage points (37% ordinary vs 20% LTCG). The higher your income, the more valuable the long-term holding period becomes.
Imagine you bought 100 shares at $100 each ($10,000 total). They are now worth $160 per share ($16,000). If you sell after 11 months with $80,000 in ordinary income (single), you owe 22% on the $6,000 gain ($1,320). If you wait one more month, you owe only 15% ($900) — saving $420 for a one-month wait.
Before December 31, review all unrealized gains and losses. Consider selling short-term losers to offset short-term gains (which are taxed higher). Any remaining net losses can offset long-term gains or $3,000 of ordinary income. This strategy, called tax-loss harvesting, can significantly reduce your annual tax bill.
You must hold the asset for more than one year (at least one year and one day). The holding period starts the day after you acquire the asset. If you buy on January 1, 2025, you must sell no earlier than January 2, 2026 for long-term treatment.
Yes. Each asset is classified independently based on its holding period. Short-term gains and losses are netted separately from long-term gains and losses. Any net short-term gain is taxed at ordinary rates, and net long-term gain at preferential rates.
Short-term gains are first offset by short-term losses, and long-term gains by long-term losses. Any remaining net loss in one category offsets the net gain in the other. Up to $3,000 of overall net loss can be deducted against ordinary income.
Inherited assets are automatically treated as long-term regardless of how long the decedent held them. They also receive a stepped-up cost basis to the fair market value at the date of death, which often eliminates most or all of the gain.
High-income earners may owe the 3.8% Net Investment Income Tax (NIIT) on top of the regular capital gains rate. This applies to modified AGI above $200,000 (single) or $250,000 (MFJ), making the effective top rate 23.8% for long-term gains.
Usually, but not always. If an asset is declining in value or you need liquidity, the tax savings may not justify the risk of further loss. Sometimes locking in a short-term gain is the better financial decision despite the higher tax rate.