Your long-term gains and short-term gains are netted on Schedule D. If you have $200 LT gain and $100 ST gain, you have a net capital gain of $300. You should see that amount on Line 7 of your Form 1040. If you click on Forms at the top, find Schedule D in the forms list. It will show your short-term and long-term gains and then in Part 3, it nets them together. Scroll down to the bottom of the page and you can click on Quick Zoom next to the Schedule D Worksheet and Qualified Dividend and Capital Gain Tax Worksheet to see the details of the tax calculation for capital gains tax.
The tax rate you pay in 2021 depends on whether your net gain is short-term or long-term.
- Short-term profits are taxed at your maximum tax rate, just like your salary, up to 37% and could even be subject to the additional 3.8% Medicare surtax, depending on your income level.
- Long-term gains are treated much better. Long-term gains are taxed at 15% or 20% except for taxpayers in the 10% or 15% bracket. For low-bracket taxpayers, the long-term capital gains rate is 0%. There are exceptions, of course, since this is tax law.
- Long-term gains on collectibles—such as stamps, antiques and coins—are taxed at 28%, unless you're in the 10% or 15 % or 25% bracket, in which case the 10% or 15% rate or 25% rate applies
- Gains on real estate that are attributable to depreciation—since depreciation deductions reduce your cost basis, they also increase your profit dollar for dollar—are taxed at 25%, unless you're in the 10% or 15% bracket.
- Long-term gains from stock sales by children under age 19—under age 24 if they are students—may not qualify for the 0% rate because of the Kiddie Tax rules. (When these rules apply, the child’s gains may be taxed at the parents’ higher rates.)
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