Capital Gains Methodology
This hub documents how TaxCalcHub estimates federal capital gains tax in our calculators and how we structure the 2026-focused guides. The goal is transparency: what we assume, what we include, and what we exclude.
Definitions we use
- Capital gain: sale price minus cost basis (simplified).
- Short-term gain: generally assets held 1 year or less; taxed like ordinary income.
- Long-term gain: generally assets held more than 1 year; uses separate federal LTCG rate bands.
Core assumptions
- Federal-only unless a page explicitly includes state tax.
- Stacking logic: long-term gains sit on top of other taxable income for rate-band placement.
- Ordinary-income integration: short-term gains are treated as additional ordinary taxable income.
- Scope limits: specialized surtaxes and edge cases are excluded unless a page says otherwise.