A trust pays the top capital gains rate at $16,250. A married couple pays it at $613,700

Sixteen thousand two hundred and fifty dollars. That is the taxable income at which an estate or a trust begins paying the top long-term capital gains rate in 2026. A married couple filing a joint return reaches the same rate at $613,700.

Both figures sit in the same paragraph of the same document, section 4.03 of Revenue Procedure 2025-32. Neither is new and neither is contested. What is strange is that the second number appears on every tax page in the country and the first appears on almost none of them.

That gap is the shape of the whole subject. The familiar table of 0, 15 and 20 percent is accurate as far as it goes, and it does not go far. Underneath it sits a rate schedule with five preferential rates rather than three, a surtax whose thresholds have not moved since 2013, and a set of dollar lines that stopped matching the income brackets in 2018 and have been drifting away from them every year since.

What are the capital gains tax brackets for 2026?

For 2026 the zero rate on long-term gains runs to $49,450 of taxable income for a single filer and $98,900 for a couple filing jointly. The 15 percent rate runs to $545,500 and $613,700. Above those points the rate is 20 percent. Heads of household get $66,200 and $579,600.

Filing status	Zero rate up to	15 percent up to	20 percent above
Married filing jointly, surviving spouse	$98,900	$613,700	$613,700
Head of household	$66,200	$579,600	$579,600
Single, and all other individuals	$49,450	$545,500	$545,500
Married filing separately	$49,450	$306,850	$306,850
Estates and trusts	$3,300	$16,250	$16,250

Those are the amounts the IRS calls the maximum zero rate amount and the maximum 15 percent rate amount, and they are set once a year. The 2025 versions, published in Revenue Procedure 2024-40, were $48,350 and $533,400 single, $96,700 and $600,050 joint, $64,750 and $566,700 head of household. Every individual figure went up between 2.24 and 2.28 percent.

That is the first practical problem with the subject. A table like this looks the same whichever year it belongs to. A page carrying last year's numbers is indistinguishable from a page carrying this year's until you compare it against the revenue procedure, and the revenue procedure is a 36-page document that almost nobody opens.

Why does the 20 percent rate begin below the top income bracket?

Because since 2018 the two schedules have been set independently. The capital gains breakpoints are freestanding dollar amounts indexed on their own, and the ordinary brackets are indexed on theirs. They no longer meet at any point, and the gap between them is now measured in six figures.

Before the 2017 law, section 1(h) defined the zero rate by reference to the income brackets themselves. The statutory language gave the zero rate to gain falling within "the amount of taxable income which would (without regard to this paragraph) be taxed at a rate below 25 percent", and the 15 percent rate to gain below the point where the 39.6 percent rate began. The lines were the same lines. You could read one schedule off the other.

Section 1(j)(5) replaced both of those phrases with fixed dollar figures. The zero rate now stops at "the maximum zero rate amount" and the 15 percent rate at "the maximum 15-percent rate amount", each starting from a 2018 base and rising with its own inflation adjustment, rounded down to the nearest $50.

The result is a schedule that nearly lines up and does not. A single filer in 2026 leaves the 12 percent ordinary bracket at $50,400 of taxable income and leaves the zero capital gains rate at $49,450, which is $950 earlier. For a joint return the same two lines sit $1,900 apart. For a head of household, $1,250.

At the top the discrepancy is much larger, and it runs the other way. A single filer hits the 20 percent capital gains rate at $545,500 while the 37 percent ordinary bracket does not begin until $640,600, so the top gains rate arrives $95,100 early, inside the 35 percent band. For a joint return the gap is $155,000. For a head of household it is $61,000, and for a married person filing separately it is $77,500.

Nobody designed that. It is what happens when two schedules that used to be one schedule are indexed apart for eight years.

How much income actually fits under the zero rate?

More than the table suggests, because the breakpoint is measured against taxable income and taxable income is what is left after the deductions. For 2026 a single filer under 65 taking the standard deduction can have $65,550 of gross income before any of a long-term gain leaves the zero rate. For a joint return the figure is $131,100.

The arithmetic is plain addition. The 2026 standard deduction is $16,100 single, $24,150 head of household and $32,200 joint. Add the zero rate ceiling on top of it and you have the gross income that fits underneath: $65,550 single, $90,350 head of household, $131,100 joint.

Age raises it twice over. The additional standard deduction for someone 65 or older is $1,650, or $2,050 for an unmarried person who is not a surviving spouse. Separately, section 70103 of Public Law 119-21 added a $6,000 deduction for each qualified individual aged 65 or over, for tax years beginning before 1 January 2029. A single filer over 65 therefore reaches $73,600 of gross income before leaving the zero rate, and a couple who are both over 65 reach $146,400.

There is a catch inside that last figure, and it is the sort of interaction the headline table cannot show. The $6,000 senior deduction falls by 6 percent of modified adjusted gross income above $75,000, or $150,000 on a joint return. A realized gain sits in adjusted gross income. So the gain that fills the zero rate band from above is simultaneously shrinking the deduction that holds the band open from below. At $73,600 and $146,400 the two just miss colliding. Push past them and both effects run at once.

Why does a trust reach the top rate at $16,250?

Because the statute gave estates and trusts their own base amounts and made them a fraction of the individual ones. Section 1(j)(5)(B) set the 2018 starting figures at $2,600 and $12,700 for a trust, against $77,200 and $479,000 for a joint return. Indexation has carried both forward in proportion ever since.

In 2026 that produces a joint 20 percent threshold 37.8 times the trust threshold, and a joint zero rate ceiling exactly 30 times the trust ceiling. The trust ordinary schedule is compressed in the same way and further: 10 percent to $3,300, 24 percent to $11,700, 35 percent to $16,000, then 37 percent. Four brackets, all of them exhausted before a trust has earned what a single filer earns in a quarter.

This is not an oversight and it is not new. Compressed trust brackets exist to remove the incentive to park income in a trust rather than distribute it, and they do that job by making retention expensive fast. The number is worth publishing anyway, because a trustee deciding whether to distribute a realized gain or accumulate it is looking at a 20 percent rate on the trust side against, in many cases, a zero or 15 percent rate on the beneficiary's, and almost no consumer-facing page states the trust figure at all.

What about the 3.8 percent that never moves?

The net investment income tax adds 3.8 percent on investment income once modified adjusted gross income passes $200,000, or $250,000 on a joint return. Those thresholds were written into section 1411 in 2010, took effect in 2013, and have never been adjusted for inflation. There is no indexing clause in the section.

The absence is verifiable in two directions. Read the statute and there is no cost-of-living provision anywhere in it. Read Revenue Procedure 2025-32, which adjusts something in the region of sixty separate Code sections for 2026, and section 1411 is not among them.

What that does to the schedule is easy to miss. Take a single filer whose income is mostly investment income. The 15 percent band runs to $545,500 of taxable income, but the surtax starts at $200,000 of modified adjusted gross income, so the marginal rate on long-term gain steps from 15 percent to 18.8 percent about $345,000 before the table says anything happens. On a joint return the step comes at $250,000, some $363,700 before the 20 percent line. By the time either filer reaches the 20 percent band the true marginal rate is 23.8 percent.

The erosion is arithmetic. The consumer price index for all urban consumers averaged 232.957 in 2013 and read 333.918 in July 2026. Holding purchasing power constant, the 2013 threshold of $200,000 corresponds to $286,678 today, and the $200,000 now written in the statute buys what $139,529 bought when the tax began. That is a fall of 30.2 percent in the real value of the exemption, achieved without a single vote.

Estates and trusts are treated differently here, and in the one direction nobody expects. Section 1411 keys the trust threshold not to a fixed dollar figure but to the point where the top trust bracket begins, which for 2026 is $16,000. Trusts have an indexed surtax threshold. Individuals do not.

Are there really only three rates?

There are five preferential rates in section 1(h), not three. Alongside 0, 15 and 20 percent the statute imposes 25 percent on unrecaptured section 1250 gain and 28 percent on collectibles gain and on the taxable part of qualified small business stock. Both sit above the 20 percent the standard table presents as the ceiling.

The 25 percent rate is the one that reaches ordinary people, because it is depreciation coming back. A landlord who claimed depreciation on a rental for fifteen years and then sold it does not simply have a long-term gain. The portion of the gain attributable to that depreciation is unrecaptured section 1250 gain and is taxed at up to 25 percent, and the rest at the familiar rates. Nothing about the transaction looks unusual, and the applicable rate is five points above the number the seller has been reading about.

The 28 percent rate covers collectibles: art, antiques, precious metals, coins, and by explicit statutory cross-reference the gain on qualified small business stock that section 1202 does not exclude. A gold exchange-traded fund holding bullion is inside this category. An index fund is not. The distinction is invisible on a brokerage statement and decisive on a return.

There is one more piece of the definition that changes the arithmetic for a lot of people. Section 1(h)(3) defines adjusted net capital gain, the measure the 0, 15 and 20 percent rates actually run against, as net capital gain minus the 25 and 28 percent categories, plus qualified dividend income. Qualified dividends are taxed inside the same brackets and consume the same room. A retiree with $40,000 of qualified dividends has $9,450 of zero rate space left before selling anything at all.

Why is the joint threshold only 12.5 percent above the single one?

Because the statute set the two independently at the top and proportionally at the bottom. Section 1(j)(5)(B) defines the single filer's zero rate amount as exactly one half of the joint amount, but gives the single filer's 15 percent amount its own base figure, $425,800 against the joint $479,000. The relationship is 2 to 1 at the bottom and 1.125 to 1 at the top.

Follow that through to 2026 and the joint zero rate ceiling of $98,900 is precisely twice the single ceiling of $49,450, to the dollar. The joint 20 percent threshold of $613,700 is 1.125 times the single threshold of $545,500. Two single filers with $545,500 of taxable income each would stay inside the 15 percent band on $1,091,000 between them. Married and filing jointly, they cross into 20 percent at $613,700.

Filing separately does not recover it. The maximum 15 percent amount for a separate return is defined as one half of the joint figure, which is $306,850 for 2026. That is $238,650 below the threshold the same person would have had filing as a single individual on the same income.

Who actually lands in each bracket?

Very few people. Of the 160,602,107 individual returns filed for tax year 2023, Statistics of Income Table 1.4 records 12,392,020 with a taxable net gain on Schedule D, or 7.72 percent. Those returns reported $966.17bn between them, and two thirds of the money sits on a quarter of one percent of the returns.

The distribution is worth stating precisely. Returns with adjusted gross income below $100,000 account for 4,747,718 of the gain-reporting returns, which is 38.3 percent of them, and $44.94bn, which is 4.65 percent of the dollars. The average gain on those returns is about $9,466.

At the other end, returns with adjusted gross income of $1m or more account for 416,304 gain-reporting returns, 0.26 percent of all returns filed, and $639.60bn, which is 66.2 percent of the total. Returns above $10m account for 20,409 of them, 0.0127 percent of all returns filed, and $358.37bn, or 37.1 percent of every dollar of taxable net gain in the country. The average gain on one of those returns is $17.56m.

Two limits on that reading, and they matter enough to state where the numbers are rather than at the end. Statistics of Income classifies by adjusted gross income, and every breakpoint in this piece runs on taxable income, which is smaller. The two cannot be laid on top of each other, so the table above shows where the gains are concentrated and does not show how many returns fell in each rate band. And Schedule D taxable net gain is not the same measure as adjusted net capital gain: it excludes qualified dividends, which belong in the brackets, and includes the 25 and 28 percent categories, which do not.

What the data does establish is the scale of the zero rate. Statistics of Income counts 1,627,947 nontaxable returns carrying a taxable net gain, totalling $37.07bn, on which no income tax was due at all. That is a real population, roughly one in eight of everyone who reported a gain, and it is the group for whom the difference between $49,450 and $50,400 is the difference between a tax bill and none.

Questions

What is the 2026 capital gains tax rate?

Long-term gains are taxed at 0, 15 or 20 percent depending on taxable income, with 25 percent on unrecaptured section 1250 gain and 28 percent on collectibles. Short-term gains, on assets held one year or less, are taxed at ordinary rates of 10 to 37 percent.

At what income do you pay 0 percent on capital gains?

Up to $49,450 of taxable income for a single filer in 2026, $98,900 filing jointly, $66,200 for a head of household and $3,300 for an estate or trust. Taxable income is after deductions, so the gross income that fits underneath is higher.

Do capital gains push you into a higher tax bracket?

Not for the ordinary income underneath them. Section 1(h) computes the ordinary tax on taxable income reduced by the net capital gain, so gains stack on top rather than displacing wages. They do raise adjusted gross income, which drives the 3.8 percent surtax and other income-tested amounts.

When does the 3.8 percent net investment income tax apply?

Once modified adjusted gross income exceeds $200,000, or $250,000 on a joint return and $125,000 filing separately. Those figures are set in section 1411 and are not indexed for inflation, so the same dollar thresholds have applied since 2013.

Are the brackets different for a trust?

Sharply. For 2026 an estate or trust has a zero rate ceiling of $3,300 and reaches the 20 percent rate at $16,250 of taxable income, against $613,700 for a couple filing jointly.

Do qualified dividends use the same brackets?

Yes. Section 1(h)(3) folds qualified dividend income into adjusted net capital gain, so dividends occupy the same zero and 15 percent bands and reduce the room available to a realized gain.