The bill
If you sold more
How the stacking works, and why "in the 22% bracket" is the wrong mental model
The IRS taxes a long-term gain in layers, not by headline bracket. Your ordinary income fills the bottom of the schedule first. The gain sits on top of it — but unlike a raise, the gain itself has its own rate table: 0% up to the top of the 15% band, 15% until $49,450 (single) or $98,900 (joint) of taxable income for 2026, then 20%. A married couple with $45,000 of wages who realize $50,000 of long-term gain pay zero on the first $53,900 of combined taxable income — which swallows their entire wage tax and most of the gain. This is the "the 0% bracket is real money" situation, and bitcoin holders who inherited early coins fall into it more often than they assume.
The headroom line under the result is the practical number: how many additional dollars of long-term gain you can stack this year before the rate steps from 0% to 15%, and before 15% steps to 20%. In low-income years — the year you retire, the year between jobs, the year you live on the stack — that headroom is a window that closes January 1. Several holders a year mail this page's screenshot to their accountant and realize the whole portfolio in three good years instead of one bad one.
The two taxes that surprise holders
NIIT. If modified AGI crosses $200,000 single / $250,000 joint, a further 3.8% applies to the smaller of the gain or the excess over that line. It is not a bracket — it is a toll gate, and a $125,000 sale that lands MAGI at $250,400 pays it on the whole gain. The calculator flags this and shows the dollars.
Short term. Hold 366 days instead of 364 and the gain is taxed as wages. The calculator's holding-period toggle prices that one year of patience exactly; at the top bracket the spread on a $50,000 gain is over $8,000.
Basis, wallets, and the part this page cannot do for you
Cost basis is per lot, per wallet, chosen by an accounting method you declare: FIFO, specific identification, or (since 2025) per-wallet accounting under the Rev. Proc. that moved crypto toward securities-style rules. There is no wash-sale rule for crypto as of the 2026 tax year, so selling a covered call… sorry, selling at a loss and buying back is currently legal — until a future statute says otherwise, and several have been introduced. Keep dated records of buys, fees, and wallet transfers; the 1099-DA broker forms that started arriving in 2025-2026 will not know what your cold wallet cost you.
FAQ
I spend BTC on coffee and hardware. Do I need this page?
Every disposition of bitcoin is a sale in the IRS's eyes, including a pizza. Small daily ones are trivial to compute but real; this page is for the disposition that has a year-end conversation about it.
What if the sale is at a loss?
The calculator tells you so. Crypto losses offset gains, then up to $3,000 of ordinary income per year, and the rest carries forward.
Does gifting or inheriting bitcoin change the math?
Inherited bitcoin takes a stepped-up basis at date-of-death value — the gain you sell on may be zero no matter what the ancestor paid. That case needs the estate's appraisal, not this form.
State tax?
Not modeled. Nine states plus D.C. tax nothing, and the rest run roughly 3–13% on the same gain; the federal number here is the floor, not the total.