Capital Gains Holding Period
Estimate tax savings from holding your investment beyond one year — compare short-term vs long-term capital gains rates.
How It Works
The U.S. tax code treats capital gains differently based on how long you held the asset. If you sell an investment before holding it for one full year (365 days), the profit is considered a short-term capital gain and is taxed at your ordinary income tax rate — which can be as high as 37%. However, if you hold the investment for at least one year and one day, the profit qualifies as a long-term capital gain and is taxed at reduced rates of 0%, 15%, or 20%, depending on your taxable income.
This calculator estimates the tax savings you can capture by waiting until the investment reaches long-term status. Enter your purchase price (cost basis), the current or expected sale price, the number of days you have held the asset, and your income tax bracket. The tool instantly shows your short-term tax bill, the projected long-term tax, and the absolute dollar savings. A countdown shows how many days remain until you qualify for the lower long-term rate — or confirms that you are already long-term.
FAQ
What is the difference between short-term and long-term capital gains?
Short-term capital gains are profits from assets held for less than one year and are taxed at your ordinary income tax rate (10–37%). Long-term capital gains apply to assets held for one year or longer and are taxed at preferential rates of 0%, 15%, or 20% depending on your income.
When does a capital gain become long-term?
A capital gain becomes long-term after you have held the asset for more than one year (365 days). The holding period starts the day after you acquire the asset and ends on the day you sell it.
How much can I save by waiting for long-term treatment?
Selling before the one-year mark means your gain is taxed as ordinary income, which can be as high as 37%. Waiting until 365 days qualifies you for long-term capital gains rates as low as 0%. The exact savings depend on your tax bracket and the size of your gain.
Does this calculator include state taxes or the NIIT surtax?
No. This calculator focuses on the tax rate difference between short-term and long-term capital gains. It does not account for state taxes, the 3.8% Net Investment Income Tax (NIIT), or other surtaxes that may apply to high-income taxpayers.
What tax brackets does this calculator use?
The 2025 tax brackets used in this calculator are: 10% (income ≤ $11,925), 12% ($11,926–$48,475), 22% ($48,476–$103,350), 24% ($103,351–$197,300), 32% ($197,301–$250,525), 35% ($250,526–$626,350), and 37% (>$626,350). Long-term rates map to 0% for 10/12% brackets, 15% for 22/24/32/35% brackets, and 20% for the 37% bracket.
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More calculators coming soon: tax-loss harvester, wash sale tracker, capital gains estimator.