IRS Tax Code Sec. 1(h), 1411 & 121 Verified 2026
US Capital Gains Tax Rates & NIIT Guide
Authoritative handbook on federal capital gains tax rates — short-term vs long-term (0%, 15%, 20%), 3.8% Net Investment Income Tax (NIIT), Section 121 primary home exclusion, and 1031 exchanges.
Capital Gains Tax Rate & NIIT Evaluator
Evaluate your federal capital gains tax bracket and 3.8% NIIT threshold.
Long-Term Capital Gains Rate: 15%
Assets held for over 1 year qualify for preferential federal capital gains tax rates (15%).
Tax Rule: Primary residence gains up to $250k (Single) / $500k (Married) are tax-free under Section 121.
Frequently Asked Questions
Short-term capital gains apply to assets held for 1 year or less and are taxed at ordinary federal income tax rates (up to 37%). Long-term capital gains apply to assets held for more than 1 year and qualify for lower preferential rates of 0%, 15%, or 20%.
The NIIT is a 3.8% surtax levied on net investment income (capital gains, dividends, interest, rental income) for individuals with modified adjusted gross income (MAGI) exceeding $200,000 (Single) or $250,000 (Married Filing Jointly).
Under IRS Section 121, homeowners can exclude up to $250,000 of capital gains ($500,000 for married couples) on the sale of their primary residence if they lived in the home for at least 2 out of the past 5 years.
IRS Section 1031 allows real estate investors to defer paying capital gains taxes on investment property sales by reinvesting the proceeds into a replacement like-kind property within 180 days.