Capital Gains Rules Have Changed: Which Investors Pay More This Year?
Written by
G. Brian Davis
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Rebekah Evans
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While most of the rules around capital gains tax haven’t changed this year, other tax rules have. That impacts your capital gains strategy.
In fact, many investors find themselves increasingly pinched by old thresholds that haven’t changed to keep up with inflation. Here are which investors pay more in capital gains taxes this year.
Capital Gains Changes: Rules and Strategy
The brackets for long-term capital gains taxes have shifted upward, with single Americans paying 0% up to $49,450 in 2026 income ($98,900 for married taxpayers filing jointly). Single Americans earning $49,451 to $545,500 pay 15% ($98,901 to $613,700 for married filers) and taxpayers above those thresholds pay 20%.
While the doubled standard deduction had been scheduled to sunset in 2025, the One Big Beautiful Bill Act (OBBBA) made the higher standard deduction permanent, pushing it up to $16,100 for single filers and $32,200 for married couples in 2026. That will help many Americans keep their modified adjusted gross income (AGI) in the 0% capital gains tax bracket.
Likewise, the OBBBA boosted the state and local tax tax deduction, which keeps their taxable income in lower capital gains brackets.
Another OBBBA change returned 100% bonus depreciation for certain property types. For passive real estate investors for example, that makes the “lazy 1031 exchange” strategy more viable than ever for offsetting capital gains. It involves investing in a new real estate syndication or other passive investment with huge depreciation in the same year another investment sells: the “loss” from depreciation helps offset the capital gain.
The OBBBA also changed the rules for Qualified Small Business Stock benefits. “Now founders and early investors get tiered capital gain exclusion for three- and four-year holding periods and the gain limit rose,” explained Jonathan Gesserman, financial services analyst at RSM.
Which Investors Pay More This Year?
Inflation has effectively pushed the thresholds lower for some tax rules.
Every year since the Net Investment Income Tax (NIIT) was introduced in 2013, inflation has lowered the real income threshold for who pays the extra 3.8% on top of regular capital gains tax. The $200,000 threshold for single filers and $250,000 for married couples were the equivalent of $280,554 and $350,692 in today’s dollars, per USInflationCalculator.com. So more Americans pay the extra NIIT every year.
Similarly, the homeowner exclusion on the first $250,000 of capital gains ($500,000 for married couples) effectively shrinks every year.
The high concentration of gains in a few tech giants has also pushed up capital gains taxes for many investors as they rebalance their portfolios. Some states have also raised their capital gains taxes, especially on higher earners. For instance, Washington introduced a new 2.9% capital gains tax on top of the existing 7% capital gains tax for higher earners , according to the Tax Foundation. “Many of my clients have seen higher taxes from state rather than federal law, as states raise capital gains taxes on high net worth individuals,” said Evan Farr, attorney at Farr Law.
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