Quick Answer
Yes, capital gains tax brackets increased with inflation adjustments in 2026. The 0% bracket now applies to taxable income up to $48,350 (single) or $96,700 (married filing jointly), while the 15% bracket extends to $533,400 (single) or $600,050 (married). New cryptocurrency reporting requirements also took effect.
Best Answer
Robert Kim, CPA
Individual investors with stocks, mutual funds, or other capital assets
What capital gains tax changes took effect in 2026?
The major change for 2026 is the inflation adjustment to capital gains tax brackets, which benefits most taxpayers by expanding the income ranges where lower rates apply. Additionally, new cryptocurrency reporting requirements began, and the Net Investment Income Tax (NIIT) thresholds increased.
Updated capital gains tax brackets for 2026
Long-term capital gains (assets held over one year) are taxed at preferential rates based on your ordinary income level:
0% rate: For taxable income up to $48,350 (single) or $96,700 (married filing jointly)
15% rate: For taxable income from $48,351 to $533,400 (single) or $96,701 to $600,050 (married filing jointly)
20% rate: For taxable income above $533,400 (single) or $600,050 (married filing jointly)
Example: How the brackets work in practice
Sarah (single) has a $75,000 salary and sells stock for a $25,000 long-term gain. Her total income is $100,000. Here's how the gain is taxed:
New cryptocurrency reporting requirements
Starting in 2026, cryptocurrency exchanges must report more detailed transaction information to the IRS via Form 1099-DA. This includes:
This change makes it crucial to maintain detailed crypto records, as the IRS will have better visibility into your transactions.
Net Investment Income Tax (NIIT) changes
The 3.8% NIIT threshold increased to $250,525 (single) or $501,050 (married filing jointly) in 2026. This tax applies to investment income, including capital gains, for high earners above these thresholds.
Strategic considerations for 2026
Harvest losses before year-end: You can offset up to $3,000 of ordinary income with capital losses, with excess losses carrying forward.
Consider installment sales: For large gains, spreading recognition over multiple years can keep you in lower brackets.
Timing of asset sales: If you expect lower income in 2027, consider deferring sales to potentially qualify for the 0% rate.
Qualified Small Business Stock: The Section 1202 exclusion allows up to $10 million or 10 times basis (whichever is greater) to be excluded from federal tax on qualifying small business stock sales.
What you should do
Review your investment portfolio for tax-loss harvesting opportunities before December 31. If you're planning significant asset sales, calculate whether spreading them across tax years might reduce your overall tax burden. For cryptocurrency holders, ensure you're tracking basis and transactions carefully with the new reporting requirements.
Use our [return scanner](return-scanner) to identify any missed capital gains reporting from previous years, and our [refund estimator](refund-estimator) to calculate potential savings from tax-loss harvesting strategies.
Key takeaway: The 0% capital gains bracket now extends to $48,350 (single) or $96,700 (married), providing more taxpayers access to tax-free investment gains with proper planning.
*Sources: [IRS Revenue Procedure 2025-32](https://www.irs.gov/newsroom), [IRC Section 1(h)](https://www.law.cornell.edu/uscode/text/26/1)*
Key Takeaway: Capital gains brackets increased with inflation, expanding the 0% rate to $48,350 (single) and adding new crypto reporting requirements.
2026 Long-term capital gains tax brackets by filing status
| Tax Rate | Single Filer | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 0% | Up to $48,350 | Up to $96,700 | Up to $64,750 |
| 15% | $48,351 - $533,400 | $96,701 - $600,050 | $64,751 - $566,700 |
| 20% | Over $533,400 | Over $600,050 | Over $566,700 |
More Perspectives
Michelle Woodard, JD
High-income individuals subject to the highest capital gains rates and Net Investment Income Tax
Advanced implications for high-income investors
High earners face the most complex capital gains landscape in 2026, with multiple layers of taxation and new planning opportunities created by the bracket adjustments and NIIT threshold increases.
Multi-layered tax structure for high earners
For taxpayers above the top bracket thresholds, capital gains face multiple taxes:
Example: High-earner capital gains calculation
Executive with $800,000 salary sells stock for $500,000 gain:
Advanced strategies for 2026
Charitable Remainder Trusts: Contribute highly appreciated assets to defer or eliminate capital gains tax while generating income and charitable deductions.
Opportunity Zone investments: Deferring gains through Qualified Opportunity Funds can provide significant benefits, especially with the temporary deferral expiring in 2027.
Asset location optimization: Hold tax-inefficient investments in retirement accounts and tax-efficient investments in taxable accounts to minimize the impact of high capital gains rates.
Delaware Statutory Trusts (DSTs): For real estate investors, DSTs can provide 1031 exchange opportunities while diversifying holdings and reducing management burdens.
State tax considerations
Several states have no capital gains tax (Florida, Texas, Washington), making domicile planning increasingly important for high earners. However, source state rules may still apply to certain assets like real estate or business interests.
Key takeaway: High earners face effective capital gains rates exceeding 37% in some states, making sophisticated tax planning strategies essential for wealth preservation.
Key Takeaway: High earners face combined federal and state capital gains rates exceeding 37%, requiring sophisticated planning strategies to minimize tax impact.
Robert Kim, CPA
Families managing college savings, family investments, and intergenerational wealth transfer
Family investment strategies under new capital gains rules
The expanded 0% capital gains bracket creates new opportunities for family tax planning, particularly for families with college-bound children or those looking to optimize investment distributions across family members.
529 plan and education tax strategies
Step-up in basis planning: Consider gifting appreciated assets to children in low tax brackets who can sell them at 0% capital gains rates, then use proceeds for education expenses.
Kiddie tax considerations: Children under 19 (or 24 if full-time students) may be subject to kiddie tax rules, but the first $1,250 of investment income is tax-free, and the next $1,250 is taxed at the child's rate.
529 plan distributions: Qualified distributions remain tax-free, but non-qualified distributions face ordinary income tax plus 10% penalty on earnings.
Example: Family capital gains optimization
Parents in the 24% tax bracket have $30,000 in capital gains. They gift the appreciated stock to their 20-year-old college student (who has $25,000 in part-time income). The student's total income becomes $55,000, keeping them in the 15% capital gains bracket instead of the parents' 15% rate, but more importantly, a portion may qualify for the 0% rate.
Intergenerational planning strategies
Family limited partnerships: Transferring investment assets to younger generations can shift future capital gains to lower brackets while maintaining some control.
Grantor trusts: Parents can pay income taxes on trust investment gains, allowing the trust assets to grow tax-free for beneficiaries.
Education savings account coordination: Balancing 529 plans, Coverdell ESAs, and UTMA/UGMA accounts to optimize both growth and distribution taxation.
Practical family considerations
Record keeping: With multiple family members potentially having investment accounts, maintaining organized records becomes crucial, especially with new cryptocurrency reporting requirements.
Tax return coordination: Consider whether filing separate returns for adult children might optimize overall family tax burden, particularly for capital gains recognition.
Key takeaway: Families can significantly reduce capital gains taxes by strategically distributing investment assets and timing sales to take advantage of lower brackets for family members with lower incomes.
Key Takeaway: Strategic distribution of investment assets among family members can help utilize lower capital gains brackets and minimize overall family tax burden.
Sources
- IRS Revenue Procedure 2025-32 — Annual inflation adjustments including capital gains brackets
- IRC Section 1(h) — Tax on capital gains and qualified dividends
- IRS Publication 550 — Investment Income and Expenses
Related Questions
Reviewed by Michelle Woodard, JD on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.