1. Capital Gains Tax: Maximizing Investment Payouts
When you sell an investment asset like stocks, cryptocurrency, or real estate for a profit, the gain is subject to capital gains tax. Our capital gains calculator helps you estimate your tax liability based on your purchase cost, selling price, and holding period.
2. Short-Term vs. Long-Term Capital Gains
Assets held for one year or less are subject to short-term capital gains tax, which is calculated at your standard personal income tax rate. Assets held for more than one year qualify for long-term capital gains tax, which is calculated at lower rates of 0%, 15%, or 20% depending on your taxable income.
3. Adjusting Your Cost Basis
Your taxable capital gain is calculated by subtracting your cost basis from the final selling price. You can reduce your taxable gain by adding purchase fees, transaction commissions, and capital improvement costs to your original purchase price to increase your cost basis.
4. Primary Residence Exclusions & Loss Offsets
If you sell your primary home, you can exclude up to $250,000 of gain (Single) or $500,000 (Married) if you lived in the home for 2 of the past 5 years. You can also offset capital gains by selling losing investments, which is a tax strategy known as tax-loss harvesting.