Long-term capital gains—the profit you make when you sell an investment you’ve held more than one year—are taxed more gently than ordinary income. For most taxpayers, those rates remain at 0%, 15%, and 20%, but the income thresholds that determine which rate you pay are adjusted for inflation each year. Because those thresholds will change for tax year 2026, many people may find themselves in a different bracket even if their investment behavior doesn’t change. In short, the breakpoints are moving, not the statutory rates.
For 2026, the inflation-adjusted numbers will push many taxpayers slightly higher in terms of where their gains fall. These shifts are the main reason some observers say capital gains taxes are “going up” for 2026—not because the actual 0%, 15%, or 20% rates changed, but because inflation adjustments and other tax law updates can move taxpayers into higher effective brackets.
2025 capital gains tax rate income thresholds
These represent an increase of about 2.8% from 2024 levels, which aligns with the inflation-adjusted federal income tax brackets for 2025.
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2026 capital gains tax rate income thresholds
The IRS has released the 2026 long-term capital gains income brackets. (You'll use these numbers for tax returns normally filed in early 2027.)
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Additional Factors to Consider
There are a few other considerations that can affect how much you pay in 2026:
- The Net Investment Income Tax (NIIT). High-income taxpayers may owe an additional 3.8% on investment income, effectively raising the top rate for some filers.
- Different asset classes, different rates. Certain gains face unique treatment. For example, unrecaptured depreciation on real estate can be taxed up to 25%, while collectibles like art or coins can be taxed up to 28%.
- Short-term vs. long-term gains. Investments held one year or less are taxed as ordinary income, at rates up to 37%. Holding an asset just a little longer can result in significant tax savings.
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Why You Might Pay More in 2026
Even if your income doesn’t change much, you might find yourself paying more in capital gains taxes for several reasons:
- Inflation indexing can move you across thresholds. If your taxable income rises slightly and pushes part of your gains into a higher bracket, your overall bill can increase.
- Changes in deductions or credits. Adjustments to the standard deduction, child tax credit, or other items can indirectly increase your taxable income, changing how your gains are taxed.
- Phaseouts for high earners. As incomes rise, certain deductions phase out, which can also push more of your gains into higher tax territory.
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What You Can Do to Plan Ahead
Investors still have ways to manage their exposure:
- Time your sales. If you’re close to a threshold, consider waiting until a lower-income year or spreading your sales over multiple years.
- Harvest tax losses. Selling losing positions to offset gains can help keep your taxable income within a more favorable range.
- Use tax-advantaged accounts. Consider holding high-growth investments in IRAs or 401(k)s, where gains can grow tax-deferred or even tax-free.
- Mind the one-year rule. Holding an investment for more than a year converts short-term gains into long-term ones, potentially saving you thousands.
- Consult a tax professional. With the brackets shifting and new inflation adjustments taking effect, personalized advice can make a meaningful difference.
The headline long-term capital gains rates themselves aren’t dramatically changing in 2026, but the thresholds that determine who pays which rate are. Add in surtaxes and small legislative changes, and many investors will see different outcomes on next year’s tax bill. Reviewing your portfolio now—and planning around timing, losses, and holding periods—can help you keep more of your hard-earned investment returns.