Quick Answer
Yes, 2026 brings several capital gains changes: the 0% bracket now applies to single filers earning up to $48,350 (up from $47,025), qualified small business stock exclusion increased to $11.2 million, and new rules for cryptocurrency gains over $600. High earners still face the 3.8% Net Investment Income Tax on gains above $200,000 (single) or $250,000 (married).
Best Answer
Robert Kim, CPA
Individual investors with moderate investment portfolios
What capital gains tax changes took effect in 2026?
Several important capital gains provisions changed for 2026, affecting how much tax you'll pay on investment profits. The most significant changes involve bracket thresholds, small business stock rules, and cryptocurrency reporting requirements.
Updated capital gains tax brackets for 2026
The income thresholds for capital gains tax rates increased with inflation adjustments:
0% Capital Gains Rate (2026):
15% Capital Gains Rate (2026):
20% Capital Gains Rate (2026):
Example: How the bracket changes affect your taxes
Let's say you're single with $45,000 in ordinary income and sold stock for a $10,000 long-term capital gain:
2025 calculation:
2026 calculation:
Tax savings: $198 due to the higher 0% bracket threshold.
Capital gains bracket comparison table
Qualified Small Business Stock (QSBS) changes
The exclusion limit for qualified small business stock gains increased to $11.2 million per person in 2026 (up from $10.9 million in 2025). This allows entrepreneurs and early investors to exclude more gain from federal taxes when selling qualifying small business stock held for at least 5 years.
New cryptocurrency reporting requirements
Starting in 2026, cryptocurrency transactions resulting in gains over $600 must be reported on Form 8949, even if the total doesn't trigger a tax liability. This affects:
Net Investment Income Tax still applies
High earners continue to pay the additional 3.8% Net Investment Income Tax on capital gains when their modified adjusted gross income exceeds:
These thresholds did NOT increase for 2026.
Key factors for your 2026 capital gains strategy
What you should do
Review your investment portfolio and tax situation to optimize for the new brackets:
1. Calculate your current tax bracket including both ordinary income and capital gains
2. Plan the timing of asset sales to maximize the 0% capital gains bracket
3. Consider Roth conversions in years when you have capital losses to offset the conversion income
4. Update your crypto tracking to comply with the new $600 reporting threshold
Use our return scanner to identify missed opportunities from previous years and our refund estimator to see how capital gains planning affects your overall tax liability.
Key takeaway: The 2026 capital gains 0% bracket increased to $48,350 for single filers, potentially saving hundreds in taxes, while new crypto reporting rules require tracking all gains over $600.
*Sources: [IRS Publication 550](https://www.irs.gov/pub/irs-pdf/p550.pdf), [IRS Revenue Procedure 2025-12](https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments)*
Key Takeaway: The 2026 capital gains 0% bracket increased to $48,350 for single filers, potentially saving hundreds in taxes for moderate-income investors.
2026 capital gains tax brackets compared to 2025 showing increased thresholds
| Filing Status | 2025 (0% Bracket) | 2026 (0% Bracket) | Increase |
|---|---|---|---|
| Single | Up to $47,025 | Up to $48,350 | $1,325 |
| Married Joint | Up to $94,050 | Up to $96,700 | $2,650 |
| Head of Household | Up to $63,000 | Up to $65,000 | $2,000 |
| Married Separate | Up to $47,025 | Up to $48,350 | $1,325 |
More Perspectives
Michelle Woodard, JD
Investors with substantial portfolios subject to higher tax brackets and NIIT
High earner considerations for 2026 capital gains changes
While bracket threshold increases provide minimal benefit to high earners already in the 20% capital gains bracket, several changes significantly impact sophisticated investment strategies.
Net Investment Income Tax planning
The 3.8% NIIT thresholds remain unchanged at $200,000 (single) and $250,000 (married), meaning high earners continue paying up to 23.8% on capital gains (20% + 3.8%). Strategic planning becomes crucial:
Income smoothing: Consider installment sales or like-kind exchanges to spread gains across multiple years and potentially stay below NIIT thresholds.
Tax-loss harvesting: Realize losses strategically to offset gains, but be aware of the $3,000 annual limit on deducting excess losses against ordinary income.
Qualified Small Business Stock opportunities
The QSBS exclusion increase to $11.2 million creates significant planning opportunities for high-net-worth individuals involved in startups or early-stage companies. This represents $300,000 more in potential tax-free gains compared to 2025.
Alternative Minimum Tax considerations
ISO exercises and certain other transactions may trigger AMT, which uses different capital gains rates. High earners should model both regular tax and AMT scenarios when planning large transactions.
State tax coordination
Many high-tax states don't conform to federal capital gains preferences. Consider:
Key takeaway: High earners benefit most from QSBS exclusion increases and strategic timing to minimize the combined 23.8% federal rate on capital gains.
Key Takeaway: High earners benefit most from the increased QSBS exclusion and strategic timing to minimize the combined 23.8% federal rate on capital gains.
Robert Kim, CPA
Families managing investments for education funding and long-term wealth building
Family-focused capital gains strategies for 2026
Families can leverage the increased 0% brackets and new rules to optimize investments for education funding and intergenerational wealth transfer.
529 plan and education strategies
Kiddie tax considerations: Children under 19 (or 24 if students) with investment income over $2,650 pay tax at parents' rates. However, the first $1,325 is tax-free, and the next $1,325 is taxed at the child's rate (often 0%).
529 plan benefits: Gains within 529 education accounts remain tax-free for qualified expenses, making them ideal for families in higher brackets.
Income shifting opportunities
With the higher 0% brackets, families can gift appreciated assets to adult children in lower tax brackets:
Example: Parents in the 20% capital gains bracket gift stock with $40,000 in gains to an adult child earning $35,000. The child can realize up to $13,350 in gains at 0% ($48,350 - $35,000 = $13,350).
Family limited partnerships
High-net-worth families can use FLPs to shift future appreciation to children while retaining control. The increased QSBS limits also benefit family businesses structured as C corporations.
College funding timing
Families should coordinate asset sales with FAFSA filing:
Key takeaway: Families benefit from income shifting strategies using the expanded 0% capital gains brackets, potentially saving thousands on education funding and wealth transfer.
Key Takeaway: Families can save thousands by shifting appreciated assets to lower-income family members who qualify for the expanded 0% capital gains brackets.
Sources
- IRS Publication 550 — Investment Income and Expenses
- IRS Revenue Procedure 2025-12 — 2026 Tax Year Inflation Adjustments
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.