Selling Stock in 2026? Understand the Taxes Before You Sell

Before you sell stock to fund a business purchase, cover a family expense, or prepare for retirement, take a moment to look at what you’ll keep after taxes.

How long you’ve owned the shares matters, but so does your other income. For business owners, a strong profit year can affect the tax on a personal stock sale. Looking at both together gives you a better starting point for the decision.

Start with the gain

When you sell stock in a taxable investment account, your capital gain generally equals the sale proceeds minus your adjusted basis, usually what you paid, with any required adjustments.

Selling above that basis creates a gain. Selling below it creates a loss. This article covers taxable investment accounts. Trades inside an IRA or 401(k) follow different rules.

How long you’ve owned the shares affects the rate

A gain is generally short-term if you held the stock for one year or less and long-term if you held it for more than one year. Selling on the one-year anniversary generally still produces a short-term gain.

Short-term gains use the same federal income tax rate structure as wages. For 2026, those rates range from 10% to 37%. The gain adds to your other taxable income, so portions can fall into different brackets.

2026 long-term capital gains rates

Most long-term stock gains receive federal rates of 0%, 15%, or 20%, using these thresholds:

The brackets use taxable income, meaning income remaining after applicable deductions. Your salary, business revenue, or stock gain alone won’t tell you which rate applies. Other filing statuses have different thresholds.

Your other taxable income generally fills the lower brackets first, with long-term gains added above it. A sale can use the remaining room in the 0% bracket and put the rest of the gain into the 15% bracket. Larger gains can cross into the 20% bracket.

Dividends aren’t all taxed alike

Companies may pay dividends to shareholders, and the tax treatment depends on whether those payments qualify for lower rates.

Qualified dividends generally receive the same 0%, 15%, or 20% federal rates as long-term capital gains when the requirements are met. Nonqualified dividends generally use ordinary income rates.

Your Form 1099-DIV identifies the amount reported as qualified dividends. Owning a stock for more than a year does not automatically make every dividend qualified.

An additional 3.8% tax may apply

The net investment income tax can apply to stock gains and dividends when modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly.

Modified adjusted gross income is a separate income measure from taxable income. The 3.8% tax applies to the smaller of your net investment income or the amount your modified adjusted gross income exceeds the threshold. State income taxes may also affect what you keep.

Have the conversation before you sell

Before a significant sale, review when you bought the shares, their basis, and your expected income for the year. Available capital losses may also change the calculation.

For a business owner, we would look at projected business profit alongside the proposed sale and the cash you need. Then we can consider whether selling now, waiting, or spreading sales across tax years fits your situation.

Your investment goals matter too. Working with your financial advisor helps us weigh the tax consequences alongside the reasons for selling.

At Frazier & Co. CPA & Advisors, our tax advisory services help you understand how business and personal decisions affect your taxes while you still have options.

If you’re considering a stock sale or want more guidance throughout the year, schedule a 15-minute intro call. We’ll talk about what you’re planning and whether working together makes sense.

Talk Through Your Tax Planning →

© 2026