GuideCalculatorDetailed Guide

How to Build a Capital Gains Calculator

A capital gains tax calculator estimates taxes owed on investment profits. Essential for investors planning sales, tax-loss harvesting, or understanding the impact of holding periods.

What is a Capital Gains Calculator?

Capital gains are profits from selling assets (stocks, real estate, crypto). Short-term gains (held <1 year) are taxed as ordinary income; long-term gains get preferential rates (0%, 15%, or 20% depending on income).

The Formula

Capital Gain = Sale Price - Purchase Price - Transaction Costs
Short-term Tax = Gain × Ordinary Income Tax Rate
Long-term Tax = Gain × Long-term Rate (0%, 15%, or 20%)
Net Gain = Total Gains - Total Losses (up to $3,000 deductible)

Code Example

JavaScript

function calculateCapitalGains(salePrice, purchasePrice, costs, holdingMonths, income) {
  const gain = salePrice - purchasePrice - costs;
  const isLongTerm = holdingMonths >= 12;

  let taxRate;
  if (isLongTerm) {
    // 2024 long-term rates for single filers
    if (income <= 47025) taxRate = 0;
    else if (income <= 518900) taxRate = 0.15;
    else taxRate = 0.20;
  } else {
    taxRate = getOrdinaryIncomeRate(income); // Use income tax brackets
  }

  return {
    gain,
    isLongTerm,
    taxRate,
    taxOwed: Math.max(0, gain * taxRate),
    netProceeds: salePrice - costs - (gain > 0 ? gain * taxRate : 0)
  };
}

How to Build It

1
Create inputs for purchase price, sale price, and dates
2
Calculate holding period for short/long-term classification
3
Implement tax rates based on income level
4
Add support for multiple lots with different cost bases
5
Include wash sale rule warnings

Key Features to Include

Short-term vs long-term classification

Tax rate lookup based on income

Multiple lot tracking (FIFO, LIFO, specific ID)

Tax-loss harvesting suggestions

Crypto and stock support

Monetization Strategies

Premium: portfolio-wide tax analysis

Integration with brokerage accounts

Affiliate links to tax software

API for investment platforms

Recommended Tech Stack

Frontend

React with date picker and lot tracking

Backend

API for tax rate updates and lot calculations

Hosting

Vercel with secure data handling

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