Long-Term vs Short-Term Capital Gain Comparison Calculator
Compare after-tax proceeds from selling an asset as long-term vs short-term capital gain. See how much more you keep with long-term rates.
Long-Term vs Short-Term Capital Gain Comparison
Compare after-tax proceeds from selling an asset as a long-term vs short-term capital gain. Enter cost basis, sale price, and your short-term (ordinary income) and long-term capital gain tax rates.
Understanding Long-Term vs Short-Term Capital Gains
How holding period affects tax
Short-term capital gain
Gain on an asset held one year or less. Typically taxed as ordinary income at your marginal rate (e.g. 22%, 32%, 37% federally).
Higher tax rate in most cases.
Same rate as wages, interest, short-term investment income.
If you sell before the long-term threshold, you pay short-term rates.
Use marginal ordinary income rate for comparison.
Long-term capital gain
Gain on an asset held more than one year (in the US). Taxed at preferential long-term rates (e.g. 0%, 15%, 20% federally).
Lower tax rate—you keep more of the gain.
Holding period typically >1 year from purchase (or last add).
If you are close to 1 year, waiting can save significant tax.
Use your applicable long-term rate (0%, 15%, or 20% federal).
Formula Used
Capital gain = Sale price − Cost basis
Tax (short-term) = Gain × Short-term rate
Tax (long-term) = Gain × Long-term rate
After-tax = Gain − Tax. Benefit of long-term = After-tax (long-term) − After-tax (short-term)
Short-term gains are taxed as ordinary income; long-term gains at preferential rates. The same dollar gain produces different after-tax amounts depending on which rate applies. This calculator shows the exact difference for your gain and rates.
If you have a loss, no tax is due on the loss (and losses may offset gains or income subject to rules). The comparison is most useful when you have a gain and are deciding whether to sell now (short-term) or wait to qualify for long-term.
Long-Term vs Short-Term Capital Gain: Compare After-Tax Proceeds
When you sell an investment, the tax you pay depends on how long you held it. Short-term gains are typically taxed as ordinary income; long-term gains at lower preferential rates. This calculator compares after-tax proceeds so you can see how much you save by qualifying for long-term treatment.
Capital gain = sale price minus cost basis. If you held the asset one year or less, the gain is short-term and usually taxed as ordinary income. If you held more than one year, the gain is long-term and taxed at preferential rates (e.g. 0%, 15%, or 20% federally in the US). The same dollar gain can produce very different after-tax amounts.
Holding Period
In the US, long-term typically means more than one year from the date of purchase (or from the date of each lot if you have multiple purchases). State rules may differ. This calculator does not determine your holding period—it compares the tax outcome if your gain is taxed as short-term vs long-term at the rates you enter.
How It Is Calculated
Gain = Sale price − Cost basis. Tax (short-term) = Gain × Short-term rate. Tax (long-term) = Gain × Long-term rate. After-tax short-term = Gain − Tax (short-term). After-tax long-term = Gain − Tax (long-term). Benefit of long-term = After-tax long-term − After-tax short-term.
Why It Matters
If you are close to the long-term holding period, waiting to sell can save a significant amount in tax. The benefit depends on the size of the gain and the spread between your short-term and long-term rates. Use this calculator to see the exact dollar benefit and to decide whether to delay the sale (weighing tax savings against market risk).
Weighing Tax vs Market Risk
If you are a few weeks from the long-term date, the tax savings of waiting can be large. But if the market drops in the meantime, you could lose more than you save in tax. There is no one-size-fits-all answer—use this calculator to see the dollar benefit of long-term treatment and then decide based on your risk tolerance and view of the asset.
Using This Calculator
Enter cost basis (what you paid, adjusted for splits and return of capital if needed), sale price (or expected sale price), your marginal tax rate for ordinary income (short-term rate), and your applicable long-term capital gain rate. The calculator shows gain, tax under each treatment, after-tax proceeds, and the benefit of long-term.
What to Enter
Use your top marginal rate for short-term (e.g. 22%, 32%, 37% federal). For long-term, use 0%, 15%, or 20% depending on your income. Add state tax if applicable. For NIIT or other surtaxes, include them in the rate or run separate scenarios.
Conclusion
Long-term capital gains are typically taxed at lower rates than short-term gains. This calculator shows the exact after-tax difference for your gain and rates. Use it to see how much you save by qualifying for long-term treatment and to decide whether to wait to sell when you are close to the holding-period threshold.
Pair it with the Tax Drag on Investment Returns calculator to see how taxes affect ongoing returns in taxable accounts, and with capital gain/loss tools for full gain/loss reporting.
In summary: long-term capital gains are typically taxed at lower rates than short-term gains. This calculator shows the exact after-tax difference for your gain and rates so you can decide whether to wait to qualify for long-term treatment.
Frequently Asked Questions
Common questions about long-term vs short-term capital gains
What is the difference between long-term and short-term capital gain?
Short-term = gain on an asset held one year or less, typically taxed as ordinary income. Long-term = gain on an asset held more than one year, taxed at preferential rates (e.g. 0%, 15%, 20% federal). The same gain produces different after-tax amounts.
How is the benefit of long-term calculated?
Benefit = (After-tax long-term) − (After-tax short-term). That is the extra amount you keep by having the gain taxed at the long-term rate instead of the short-term rate.
What rate should I use for short-term?
Your marginal tax rate for ordinary income (federal and state if you include state tax). Short-term gains are taxed like wages and interest.
What rate should I use for long-term?
Your applicable long-term capital gain rate (e.g. 0%, 15%, or 20% federal in the US, depending on income). Add state long-term rate if applicable.
What if I have a loss?
This calculator compares tax on gains. If sale price < cost basis, you have a capital loss; no tax on the loss (losses may offset gains or income subject to rules). Enter the numbers and the result will show the loss; the comparison is most useful when you have a gain.
Does this include state tax?
Only if you add it to the rate. Enter your combined federal + state rate for short-term and long-term, or run federal-only and state-only separately.
What is cost basis?
What you paid for the asset (plus certain adjustments like commissions, reinvested dividends for some accounts). Sale price − Cost basis = Capital gain (or loss).
Should I wait to sell to get long-term rates?
If you are close to the long-term holding period (e.g. a few weeks away), use this calculator to see the tax savings. Weigh that against the risk that the price could fall before you sell. There is no one-size-fits-all answer.
How does this relate to tax drag?
This calculator compares one-time tax on a sale (long-term vs short-term). Tax drag is the ongoing reduction in return from taxes on dividends and realized gains in a taxable account. Use the Tax Drag on Investment Returns calculator for that.
Who should use this calculator?
Anyone selling (or planning to sell) an investment who wants to see how much more they keep if the gain is taxed as long-term vs short-term, and whether it is worth waiting to qualify for long-term rates.
What if I have multiple lots?
Each lot has its own cost basis and holding period. Run the calculator for each lot (or for an average lot) to see the benefit of long-term treatment. When you sell, you can choose which lots to sell (e.g. specific ID) to minimize tax.
Usage of this Calculator
Practical applications
Who Should Use This Calculator?
Investors Planning to SellTo see how much more you keep if you wait to qualify for long-term capital gain rates vs selling now (short-term).
Tax Planners & AdvisorsTo show clients the dollar benefit of long-term treatment and to support timing decisions.
Stock & Fund SellersTo compare after-tax proceeds under your short-term vs long-term rate before selling.
Anyone Near the 1-Year MarkTo quantify the tax savings of waiting a short time to qualify for long-term rates.
Limitations
Single rate: Uses one rate per treatment; actual brackets and NIIT can make effective rate different.
No state/local: Add state and local rates to your inputs if you want total tax.
No loss offset: Does not model loss carryforward or loss harvesting.
US-centric: Long-term threshold (e.g. 1 year) and rates are US; other countries have different rules.
Real-World Examples
Example: $10k cost, $15k sale, 32% short-term, 15% long-term
Gain = $5,000. Short-term tax = $1,600, after-tax = $3,400. Long-term tax = $750, after-tax = $4,250. Benefit of long-term = $850 (17% of the gain).
Example: Large gain, high ordinary rate
$50k gain at 37% short-term vs 20% long-term: short-term tax = $18,500, long-term = $10,000. Benefit of long-term = $8,500. Waiting to qualify can save a large amount on big gains.
Example: Near 1-year holding period
If you are 2 months from the long-term date, use this calculator with your expected sale price and rates. Weigh the tax savings of waiting against the risk that the price drops in the meantime.
Summary
Quick recap
This calculator compares after-tax proceeds from selling an asset as a long-term vs short-term capital gain. You enter cost basis, sale price, short-term tax rate (ordinary income rate), and long-term capital gain rate. It shows the gain, tax under each treatment, after-tax amounts, and the benefit of long-term. Use it to see how much you save by qualifying for long-term rates and to decide whether to wait to sell when you are close to the holding-period threshold. Pair it with the Tax Drag on Investment Returns calculator for ongoing tax impact in taxable accounts.
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Long-Term vs Short-Term Capital Gain Comparison Calculator
Compare after-tax proceeds from selling an asset as long-term vs short-term capital gain. See how much more you keep with long-term rates.
How to use Long-Term vs Short-Term Capital Gain Comparison Calculator
Step-by-step guide to using the Long-Term vs Short-Term Capital Gain Comparison Calculator:
Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided
Frequently asked questions
How do I use the Long-Term vs Short-Term Capital Gain Comparison Calculator?
Simply enter your values in the input fields and the calculator will automatically compute the results. The Long-Term vs Short-Term Capital Gain Comparison Calculator is designed to be user-friendly and provide instant calculations.
Is the Long-Term vs Short-Term Capital Gain Comparison Calculator free to use?
Yes, the Long-Term vs Short-Term Capital Gain Comparison Calculator is completely free to use. No registration or payment is required.
Can I use this calculator on mobile devices?
Yes, the Long-Term vs Short-Term Capital Gain Comparison Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.
Are the results from Long-Term vs Short-Term Capital Gain Comparison Calculator accurate?
Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.