Selling Stock: Are There Tax Penalties on Capital Gains?

Calculate the capital gains taxes you may need to pay or the tax advantages that may help if you sell stocks at a loss.

By Adam Levy – Updated Mar 15, 2025 at 1:17 PM

Key Points

Calculate stock sale profits by subtracting the cost basis from total proceeds.
Tax rates for profits depend on the holding period and total annual income.
Use tax-advantaged accounts to invest and avoid capital gains taxes on stocks.

A capital gain is any profit from the sale of a stock, and it has unique tax implications. If you sell stock for more than you originally paid for it, you may have to pay taxes on your profits.

Here's what you need to know about selling stock and the taxes you may have to pay.

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An infographic explaining how your earnings are taxed when you sell shares of stock. — Image source: The Motley Fool.

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Capital Gains Tax

The tax an investor pays on the profit made when an investment is sold.

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Data source: Internal Revenue Service Revenue Procedure document 2024-40. Figures represent taxable income, not just taxable capital gains.
Long-Term Capital Gains Tax Rate	Single Filers (Taxable Income)	Married Filing Jointly/Qualifying Surviving Spouse	Head of Household	Married Filing Separately
0%	Up to $48,350	Up to $96,700	Up to $64,750	Up to $48,350
15%	$48,351-$533,400	$96,7001-$600,050	$64,751-$566,700	$48,351-$300,000
20%	Over $533,400	Over $600,050	Over $566,700	Over $300,000

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About the Author

Adam Levy is a contributing Motley Fool stock market analyst covering technology, consumer, and financial stocks and how policy, economic, and consumer trends shape personal finance, Social Security and retirement savings. Before The Motley Fool, Adam was a financial advisor at Edward Jones. He studied finance and electrical engineering at Carnegie Mellon University.

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