{"id":20245,"date":"2025-03-13T03:29:57","date_gmt":"2025-03-13T08:29:57","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/"},"modified":"2025-03-13T14:30:09","modified_gmt":"2025-03-13T19:30:09","slug":"how-to-figure-capital-gains-tax","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/income\/investments\/how-to-figure-capital-gains-tax\/","title":{"rendered":"How to calculate capital gains tax"},"content":{"rendered":"\n

When you sell a capital asset like a mutual fund, exchange-traded fund (ETF), or stock, there\u2019s a tax implication. But knowing what tax rate applies depends on several factors. In this post, we\u2019ll outline capital gains taxes and how to calculate them for tax purposes.<\/p>\n\n\n\n

What is capital gains tax?<\/h2>\n\n\n
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\"how<\/figure><\/div>\n\n\n

First, let\u2019s define what a capital gain or loss is. A capital gain or loss is the difference between what you paid for a capital asset (like bonds, mutual funds, ETFs, real property, or stocks) and what you sold it for. If you sell your investment assets (for example, assets that make investment income such as dividend paying stocks) for more than you bought it, you\u2019ll have a realized capital gain. If the opposite is true and you sell the asset for less than you bought it, you\u2019ll have a capital loss.<\/p>\n\n\n\n

Capital gains tax is the taxation of capital asset gains. Your capital gains tax rate is determined by:<\/p>\n\n\n\n

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  • The length of time you own the asset (called the holding period)<\/li>\n\n\n\n
  • Your taxable income.<\/li>\n<\/ul>\n\n\n\n

    We\u2019ll outline how your taxable income relates to short-term and long-term capital gains in detail below. Take note: You don\u2019t have to pay capital gains tax for an unrealized gain on an investment capital asset you own but haven\u2019t sold yet. (An unrealized gain or loss is the change in an investment asset\u2019s value that hasn\u2019t been sold yet.)<\/p>\n\n\n\n

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