🇺🇸 United States Capital Gains Tax Guide
In the United States, capital gains tax is determined primarily by your holding period. Assets held for more than one year qualify for preferential long-term tax rates, while those sold within a year are taxed as ordinary income.
How Capital Gains Tax Works in United States
The US federal tax system splits gains into Short-Term (held < 1 year) and Long-Term (held > 1 year). Short-term gains are added to your W-2 wages and taxed at your marginal bracket (10% to 37%). Long-term gains benefit from lower fixed rates (0%, 15%, or 20%), depending on your taxable income.
Example: Capital Gains Tax in United States
Scenario
You bought 100 shares of NVDA for $10,000 and sold them for $15,000.
US Tax Optimization Strategies
Tax-Loss Harvesting
Sell losing positions to offset realized gains. You can also offset up to $3,000 of ordinary income annually.
Wash Sale Rule Avoidance
Do not repurchase a substantially identical security within 30 days before or after a loss sale, or the loss will be disallowed.
Long-Term Holding
Wait at least 366 days before selling winners to qualify for the 0-20% preferential rates instead of ordinary income rates.
Asset Location
Place high-growth, high-tax assets in tax-advantaged accounts like IRAs or 401(k)s.
