A TAXING STORY: Capital Gains and Losses

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Chris Rock once remarked, “You don’t pay taxes—they take taxes.” That applies not only to income but also to capital gains.

Capital gains result when an individual sells an investment for an amount greater than its purchase price. Capital gains are categorized as either:

Short-term gains: Gains realized on assets held for one year or less
Long-term gains: Gains realized on assets held for longer than one year

Keep in mind that the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for information regarding your individual situation.

Long-Term vs. Short-Term Gains

Short-term capital gains are taxed at ordinary income tax rates. Long-term capital gains are taxed according to different income ranges, as shown below.¹

Long-Term Capital Gains Tax Brackets for 2025

Tax RateSingleMarried Filing JointlyHead of Household

Tax Rate 0%	Single $0–$49,450	Married Filing Jointly $0–$98,900	Head of Household $0–$66,200
15%	$49,451–$545,500	$98,901–$613,700	$66,201–$579,600
20%	$545,500+	$613,700+	$579,600+

Taxpayers whose adjusted gross income exceeds $200,000 for single filers and heads of household—or $250,000 for joint filers—may also be subject to the 3.8% net investment income tax.²

The long-term capital gains rate for collectibles and precious metals remains at a maximum of 28%.³

Rules for Capital Losses

Capital losses may be used to offset capital gains. If losses exceed gains, up to $3,000 of those losses may be used to offset other kinds of income.

If you have more than $3,000 in capital losses, you may be able to carry the remaining losses forward. These losses can continue to be carried forward until future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only upon death.⁴

For some assets, calculating a capital gain or loss may not be as simple or straightforward as it sounds. As with any tax matter, individuals are encouraged to consult a tax professional before making tax-related decisions.

Sources

IRS.gov, 2025
IRS.gov, 2025
IRS.gov, 2025
IRS.gov, 2025

The content is developed from sources believed to provide accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for information regarding your individual situation.

This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer or state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.