2025 Federal Rates · Short-Term vs Long-Term · NIIT · Stocks, Real Estate, Crypto
For 2025, long-term capital gains rates (assets held over 1 year) are 0%, 15%, or 20% depending on your taxable income. Single filers pay 0% up to $47,025, 15% up to $518,900, and 20% above that. Married filing jointly: 0% up to $94,050, 15% up to $583,750, 20% above. Short-term gains are taxed as ordinary income at your regular bracket (10%–37%).
The NIIT is an additional 3.8% tax on investment income for high earners. It applies to the lesser of your net investment income or the amount your MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). This can push your effective long-term rate from 20% to 23.8%.
If you sell your primary home, you may exclude up to $250,000 of capital gains ($500,000 if married filing jointly) from federal tax, provided you owned and lived in the home for at least 2 of the last 5 years. This exclusion does not apply to investment properties or vacation homes.
Capital losses offset capital gains dollar-for-dollar. If losses exceed gains, you can deduct up to $3,000 per year against ordinary income, and carry forward the remaining loss to future years indefinitely. This strategy — tax-loss harvesting — is commonly used to minimize annual tax bills.
Yes. The IRS treats cryptocurrency as property. Selling, exchanging, or spending crypto triggers a capital gains event. If held over 1 year, you pay long-term rates. Under 1 year = short-term ordinary income rates. Mining and staking rewards are taxed as ordinary income when received.
Everything above is a federal estimate. Most sellers get surprised by the second bill: state income tax, which most states apply to capital gains at your regular income tax rate rather than the preferential federal long-term rate.
The spread is enormous. California taxes capital gains as ordinary income up to 13.3% with no long-term discount — a high earner there can pay a combined federal + state rate north of 37% on a long-term gain that would cost 20% federally alone. New York and Hawaii work similarly. Meanwhile nine states (Texas, Florida, Washington, Nevada, Wyoming, South Dakota, Tennessee, New Hampshire, and Alaska) levy no state income tax at all, so the federal number above is close to the full picture there.
Residency at the time of sale matters, not where you bought. States generally tax gains based on where you're a resident (or where the property is located, for real estate) when the sale closes — not where you lived when you bought the asset. Some people relocate to a no-income-tax state before a major liquidity event, but states are aggressive about auditing residency claims: a state can still tax you if you haven't genuinely established domicile (driver's license, voter registration, time physically present, etc.) before the sale.
Washington's capital gains excise tax is a special case. Despite having no general income tax, Washington State imposes a 7% excise tax on long-term capital gains above roughly $270,000 (indexed annually), with exemptions for real estate and retirement accounts. It's a reminder that "no income tax" doesn't always mean "no capital gains tax" — check your specific state's current rules rather than relying on its general reputation.
Add your state's marginal rate to the federal estimate above for a more complete picture, and factor state tax into any decision about timing a sale or relocating before one.