Question 1

What is the difference between short-term and long-term capital gains?

Accepted Answer

Short-term capital gains come from assets held for one year or less and are taxed at your ordinary income rate (10%-37%). Long-term capital gains come from assets held for more than one year and qualify for preferential rates (0%, 15%, or 20%) depending on your income. Holding for over a year can significantly reduce your tax bill.

Question 2

What is the NIIT (Net Investment Income Tax)?

Accepted Answer

The NIIT is a 3.8% surtax on investment income for high-earning taxpayers. It applies to single filers with modified adjusted gross income (MAGI) above $200,000 and married couples filing jointly above $250,000. Investment income includes interest, dividends, capital gains, and rental income. This calculator lets you optionally include NIIT.

Question 3

What are the long-term capital gains tax rates?

Accepted Answer

For 2024, US long-term capital gains rates are: 0% (single income up to $47,025), 15% (single $47,026-$518,900), and 20% (single above $518,900). Most taxpayers fall in the 15% bracket. The thresholds vary by filing status (single, married, head of household).

Question 4

Do I owe taxes when selling cryptocurrency?

Accepted Answer

Yes. In the US, the IRS treats cryptocurrency as property. Selling crypto for a profit triggers capital gains tax. Holdings over one year qualify for long-term rates; shorter holdings are taxed at ordinary rates. Note that using crypto to buy goods or trading one crypto for another are also taxable events. Mining income is taxed as ordinary income.

Question 5

Can I deduct investment losses?

Accepted Answer

Yes. Capital losses offset capital gains dollar for dollar. If losses exceed gains, you can deduct up to $3,000 per year against ordinary income (married filing jointly), carrying forward the remainder. Losses are first applied to gains of the same type (short-term to short-term, long-term to long-term), then across types. This calculator does not include loss harvesting.

💰 Capital Gains Tax Calculator

⚙️ Tax Settings

📊 Add a Trade

📋 Trade List

💵 Tax Summary

📖 Capital Gains Tax Basics

🔗 Related Tools