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Capital Gains Tax Estimator

Estimate your capital gains tax based on asset sale details and personal tax situation.

Asset Financials

Asset Sale Price*

Enter the price at which you sold the asset.

Asset Purchase Price*

Enter the original price you paid for the asset.

Selling Expenses

Costs incurred during the sale (e.g., broker fees, commissions).

Purchase Expenses

Costs incurred during purchase (e.g., closing costs, legal fees).

Tax Information

Holding Period Type*

Annual Taxable Income*

Your total taxable income for the year (excluding capital gains).

Filing Status*

Estimated Capital Gains Tax

Calculated Capital Gain:

Applicable Tax Rate:

25%

Estimated Capital Gains Tax:

Made with Minform

Capital Gains Tax Explained

Understanding capital gains tax is crucial for investors and individuals selling assets. This page provides a general overview of what capital gains tax is, how it's calculated, and the distinction between short-term and long-term gains.

What is Capital Gains Tax?

Capital gains tax (CGT) is a tax on the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and other property.

Short-Term vs. Long-Term Capital Gains

The tax rate on capital gains depends on how long you held the asset before selling it:

Short-Term Capital Gains: These are profits from the sale of assets held for one year or less. They are typically taxed at your ordinary income tax rates, which can be higher.
Long-Term Capital Gains: These are profits from the sale of assets held for more than one year. They are generally taxed at preferential rates, which are often lower than ordinary income tax rates.

How is Capital Gains Tax Calculated?

The calculation of capital gains tax involves determining the difference between the asset's selling price and its original cost (basis). This difference is your capital gain. The applicable tax rate is then applied to this gain.

Formula: Capital Gain = Selling Price - Original Cost (Basis)

Example Calculation

Imagine you bought 100 shares of Company X for $50 per share ($5,000 total) and sold them for $75 per share ($7,500 total) after holding them for 18 months.

Selling Price: $7,500
Original Cost (Basis): $5,000
Capital Gain: $7,500 - $5,000 = $2,500

Since you held the shares for more than one year, this would be considered a long-term capital gain and taxed at the applicable long-term capital gains rate.

Important Considerations

Tax laws are complex and can vary based on jurisdiction and individual circumstances. This information is for general educational purposes only and should not be considered tax advice. Always consult with a qualified tax professional for personalized guidance regarding your specific financial situation.