Tax & Regulation
What is Long-Term Capital Gains Tax - US?
In the US, Long-Term Capital Gains (LTCG) tax applies to profits from selling stocks, ETFs, mutual funds, or crypto held for more than 12 months, taxed at preferential rates of 0%, 15%, or 20% depending on your income.
Formula
LTCG Tax = (Sale Price - Cost Basis) × LTCG Rate (0% / 15% / 20% based on taxable income brackets)
How to Interpret
Holding investments for at least one year and one day reduces your federal tax rate from ordinary income rates (up to 37%) to LTCG rates (max 20%, plus 3.8% Net Investment Income Tax for high earners). This is one of the largest tax incentives in the US tax code and a strong argument for buy-and-hold investing.
Typical Ranges
2025 LTCG brackets (single filer): 0% up to ~$47,000 taxable income, 15% from ~$47,000 to ~$518,900, 20% above. Plus 3.8% NIIT on investment income above $200,000 (single) / $250,000 (married).