Quick answer
Bought at $10,000, sold at $15,000 after 2 years with $80,000 income → $5,000 gain taxed at 15% = $750.
How it works
Short-term gains (held under a year) are taxed as ordinary income; long-term gains get lower 0%, 15%, or 20% rates based on your taxable income.
Formula
Tax = (Sale price − Purchase price) × applicable rate
Assumptions & limitations
- Single filer, 2026 federal brackets
- Short-term gains approximated at a 24% ordinary rate
- State taxes and the 3.8% net investment income tax not included
Frequently asked questions
What if I sold at a loss?
Capital losses offset capital gains, and up to $3,000 of net loss can offset ordinary income per year.
Does this include state tax?
No — many states also tax capital gains. This estimates federal tax only.