Capital Gains Calculator

How does Titan’s capital gains calculator work?

Titan’s capital gains tax calculator gives you the ability to project how much you could owe in taxes on a capital gain, or a profit made from selling a capital asset.

Here’s how it works. You’ll input the following:

• Purchase price: This is the total amount you paid for the asset.

• Sale price: This is the total amount you received for the sale of the asset.

• Annual income: This is your annual pretax income excluding the capital gain. If you work one job, for example, this would be your salary. The calculator will factor the capital gain into your total income when it determines your tax rate.

• Filing status: This is your tax filing status.

• How long did you hold this asset: You don’t have to know the exact length of time—only if it was more or less than one year.

From there, Titan’s calculator will estimate the amount of capital gains taxes you’ll owe based on the 2022 federal tax rates. Capital gains are either taxed as short term gains or long term gains. Both are determined by your taxable income, but the long term tax rate is generally lower than the short term rate. We show you both, so that you can understand what you might owe in either case.

Note that there are a few exceptions to the usual capital gains tax rates, especially when the asset sold is property or collectibles. Titan’s calculator does not account for these exceptions.

How are capital gains taxes calculated?

Capital gains taxes are calculated on the gain made from the sale of a capital asset.

There are two categories of capital gains: short-term capital gains and long-term capital gains. Short-term capital gains applies when an individual owns an asset for less than a year before selling it; long-term capital gains applies when an individual owns an asset for more than a year.

Each is taxed differently. But both tax rates are determined by your total taxable income, which is your annual earned income plus all capital gains.

What is short-term capital gains tax?

Short-term capital gains (STCG) are incurred when an item that is held for one year or less is sold for profit. If someone purchases shares of a stock and then sells them a few months later, they’ll be taxed at the short-term capital gains tax rate.

Gains on short-term capital assets—those held for a year or less—are taxed as ordinary income. This means that the gain is added to a taxpayer’s total taxable income for the year, and the combined income is taxed based on the standard, graduated tax brackets into which that income falls.

What is long-term capital gains tax?

Long-term capital gains, on the other hand, are incurred when an item that is held for longer than a year is sold for profit. These gains are taxed at the long-term capital gains tax rate, which is lower than short-term gains.

Gains on long-term capital assets—those held for more than a year—are usually taxed at between 0% to 20%, depending on the individual’s income.

Some assets are taxed at a higher rate than this, including:

• If you sell section 1250 real property (which could be a house, building, or lot), a portion of the gain may be taxed at a maximum of 25%.

• If you sell collectibles (art, coins, etc.), your capital gains tax rate is a maximum of 28%.

• If your taxable gains come from selling qualified small business stock (section 1202) your capital gains tax rate is a maximum of 28%.

What is the difference between the regular income tax and long-term capital gains tax at the federal level?

Long-term capital gains tax rates vary based on an individual’s income, but it is always lower than the individual’s regular income tax rate.

Below are the 2022 federal capital gains tax rates by income.

2022 Capital Gains Tax Brackets

Source: Tax Foundation

Below are the 2022 federal income tax rates.

2022 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households

Source: Tax Foundation