Selling an investment for more than you paid triggers a capital gain, and how much tax you owe on that gain depends heavily on how long you held the asset before selling. Our capital gains tax calculator estimates your tax liability based on your purchase price, sale price, and holding period, distinguishing between short-term and long-term rates.
Assets held for a year or less are taxed as ordinary income at your regular tax bracket, which can be significantly higher than the long-term capital gains rate applied to assets held longer than a year. This is why many investors deliberately wait until they cross the one-year mark before selling, when the math and their financial situation allow for it.
If cryptocurrency is part of your investment picture, our crypto tax calculator applies this same short-term versus long-term logic specifically to digital assets. Our income tax calculator can also help you see how a capital gain affects your total tax bill for the year, not just the gain in isolation.