2027 Capital Gains Brackets: $102,100 and $633,600, NIIT Fixed

The 2027 capital gains breakpoints next to 2026

Section 1(h) taxes long-term gain in layers, and section 1(j)(5) turns the dollar lines between those layers into amounts the IRS adjusts for inflation. For 2027 the IRS published them as item 3.03, headed “Maximum Capital Gains Rate,” of Rev. Proc. 2026-35, which lists the amounts for the “maximum zero rate amounts and maximum 15 percent rate amounts.” Our 2026 guide to real estate capital gains carries the 2026 lines from Rev. Proc. 2025-32; here they sit side by side.

Two points on reading the table. First, these are ceilings on taxable income, after the standard deduction (2027: $33,200 joint, $24,925 head of household, $16,600 single, Rev. Proc. 2026-35 section 3.15), and the gain itself counts: your other taxable income fills the brackets first and the gain sits on top. The statute says so in terms of “taxable income” in section 1(h)(1)(B) to (D). Second, the lines moved by almost the same percentage for every individual filer, 3.24% (3.25% for the head-of-household zero line), which we computed from the two revenue procedures (our arithmetic). The single-filer 20% rate therefore starts above $563,200 of taxable income in 2027, and the joint 20% rate above $633,600. Our companion page on the 2027 tax brackets, standard deduction and high-income lines covers the ordinary-income side of the same revenue procedure.

What does not move in 2027

The revenue procedure indexes the dollar lines between the capital gain rates. The statutes below carry fixed dollar amounts or a fixed rate, and none of them appears among the items adjusted in Rev. Proc. 2026-35.

The NIIT text reads: “3.8 percent of the lesser of” net investment income or the excess of modified adjusted gross income “over the threshold amount” (26 U.S.C. 1411(a)(1)), and the threshold amount is “$250,000” for a joint return or surviving spouse, “½ of the dollar amount determined under paragraph (1)” for a married person filing separately and “$200,000” in any other case (section 1411(b)). Because the thresholds stay put while income grows, a sale that is below the NIIT line in one year can be above it later; the reverse never happens by indexing. Our real estate NIIT guide walks through which real estate income counts.

The 25% layer is written into section 1(h)(1)(E) and defined in section 1(h)(6)(A) as long-term capital gain that would be ordinary income “if section 1250(b)(1) included all depreciation.” For a rental building that is the depreciation you took (or were allowed to take). The practical effect for 2027: depreciation recapture is taxed at up to 25% whether the sale closes in 2026 or 2027, so the movement in the 15% and 20% lines only touches the rest of the gain. See our depreciation recapture guide.

Section 121 reads: “The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000.” Paragraph (b)(2)(A) substitutes $500,000 for a qualifying joint return. Our home sale exclusion guide covers the ownership-and-use tests.

December 2026 or January 2027: three examples (our arithmetic)

A sale is reported for the year it closes, so a December 2026 closing uses the 2026 lines and a January 2027 closing uses the 2027 lines. To isolate the effect of the lines we hold everything else equal: the same other taxable income, the same long-term gain, the same MAGI in both years. In real life the standard deduction, the ordinary brackets and your own income will also differ between 2026 and 2027, so treat these as the size of the effect of the breakpoints alone. We use the 0%, 15% and 20% rates of section 1(h) and ignore depreciation recapture, state tax and the alternative minimum tax.

A. Joint filers, a rental sale plus a REIT capital gain distribution

Assumptions: married filing jointly, $520,000 of other taxable income, $200,000 of long-term gain (for example $170,000 from a rental sale and $30,000 of REIT capital gain distributions), MAGI $760,000.

The later closing saves $995, which is 5% of the $19,900 by which the joint 15% line rises, because that much of the gain moves from 20% to 15%. That equals the maximum possible saving for a joint filer on this line (our arithmetic). The NIIT does not change.

B. Joint filers inside the 0% zone

Assumptions: married filing jointly, $70,000 of other taxable income, a $60,000 long-term gain, MAGI under $250,000 (no NIIT).

The later closing saves $480, which is 15% of the $3,200 by which the zero line rises (our arithmetic). Our guide to the 0% bracket explains how Social Security and the ACA subsidy can eat that room.

C. A single seller above the 15% line

Assumptions: single, $500,000 of other taxable income, $150,000 of long-term gain, MAGI $650,000.

The later closing saves $885, the maximum for a single filer on the 15% line (5% of $17,700).

The most each line can save

Whatever your numbers, the later year can lower the tax on the gain by at most 5% of the move in the 15% ceiling, plus 15% of the move in the zero ceiling, on the slice of gain that falls in those bands. The largest amounts, from the two revenue procedures (our arithmetic):

A single gain cannot collect both savings: the 0% band and the 15%/20% boundary sit at opposite ends of the income range. Moving a sale to the other year can also push other income into a higher bracket, raise or lower your NIIT base, or change a phase-out, which can outweigh a few hundred dollars. The tax calendar is a reason to check, not to rush, and the sale price, buyer and financing usually matter more.

REIT capital gain distributions use the same lines

If you own REIT shares, including a non-traded REIT, part of a distribution may be a capital gain dividend. Section 857(b)(3)(B) defines it as a dividend “designated by the real estate investment trust as a capital gain dividend in a written notice,” and section 857(b)(3)(A) says it “shall be treated by the shareholders or holders of beneficial interests as a gain from the sale or exchange of a capital asset held for more than 1 year.” That means it is long-term gain regardless of how long you held the shares, and it sits in the same 0%, 15% and 20% layers. The part of a REIT distribution that is ordinary income is not covered by these breakpoints. Dividends are also named in the NIIT definition: net investment income includes “gross income from interest, dividends, annuities, royalties, and rents” other than income from a trade or business that is not passive (section 1411(c)(1)(A)(i)). Our guide to Form 1099-DIV for non-traded REITs and BDCs covers the form that reports it, and our comparison of K-1 and 1099-DIV real estate income the difference in what you receive.

What a reader can do with this

• Find your taxable-income line. Add your expected other taxable income for 2027 to the expected gain, then compare it with the table: below $102,100 joint ($51,050 single) the 0% rate applies to part of the gain, above $633,600 joint ($563,200 single) the 20% rate starts.
• Compare both years with your own return, not these examples. The effect of the breakpoints alone is at most a few hundred to about $1,000 for most filers. The ordinary brackets, the standard deduction, a bonus or a large Roth conversion can dominate.
• Check your NIIT line separately. The $250,000 and $200,000 thresholds apply to MAGI in both years. If a gain pushes you over it, 3.8% applies to the lesser of the gain or the excess, regardless of the 2027 indexing.
• Separate the depreciation slice. On a rental, the unrecaptured section 1250 part is taxed at up to 25% in either year; only the remaining gain benefits from a higher 15% line.
• Ask about timing tools. An installment sale, a like-kind exchange or a different closing date change which year the gain lands; each has its own rules and deadlines.

This is analysis of public documents, not investment, legal or tax advice.

Frequently asked questions

Sources: Rev. Proc. 2026-35 (IRS, sections 1, 3.03, 3.15 and 4; Internal Revenue Service news release IR-2026-133, November 5, 2026); Rev. Proc. 2025-32 (IRS, sections 4.03 and 4.14); 26 U.S.C. 1(h), 1(j)(5), 121, 857(b)(3) and 1411 (Legal Information Institute text). All examples are our arithmetic and are in the CSV. Compiled by CrowdfundedWealth on November 6, 2026.