Concentrated Stock Diversification Calculator
If a large chunk of your net worth is sitting in one stock — employer RSUs you never sold, options you exercised, or shares you held through an IPO — this calculator shows you the real tax cost of different sell-down timelines. Selling everything in one year triggers the highest possible capital gains rate. Spreading sales across multiple years can keep you in lower brackets and save tens to hundreds of thousands in taxes.
Why spreading sales lowers your tax bill
Long-term capital gains are taxed at 0%, 15%, or 20% federal depending on your total taxable income for the year. The Net Investment Income Tax (NIIT) adds another 3.8% once your modified AGI crosses $200,000 (single) or $250,000 (married). When you sell a $1M position in a single year, your ordinary income plus the gain likely pushes you into the 20% + NIIT zone on a large portion of the sale. Selling over 5 or 10 years keeps each year's gain in a lower bracket.
A concrete example: a single filer with $250K of W-2 income selling an $800K gain position:
- All in year 1: Most of the gain hits 20% federal + 3.8% NIIT = 23.8% federal, plus state.
- Over 5 years ($160K gain each year): The marginal portion stays in the 15% federal bracket, with less NIIT exposure. Federal savings alone: $30,000–$70,000 depending on state.
2026 federal rates used in this calculator
| Rate | Single (taxable income) | Married filing jointly |
|---|---|---|
| 0% LTCG | Up to $49,4501 | Up to $98,900 |
| 15% LTCG | $49,450 – $545,500 | $98,900 – $613,700 |
| 20% LTCG | Over $545,500 | Over $613,700 |
| NIIT (3.8%) | MAGI over $200,0002 | MAGI over $250,000 |
Note: LTCG rates apply to net long-term capital gains on assets held more than 12 months. Short-term gains are taxed as ordinary income. This calculator assumes all gains are long-term.
State capital gains notes
- California: No preferential LTCG rate — taxed as ordinary income, up to 13.3%. Pre-populate 9.3% if your CA income is in the $100K–$500K range.
- New York: Taxed as ordinary income at state level, up to 10.9%. NYC residents add 3.876% city tax.
- Washington: 7% on net LTCG over ~$262,050/year; 9.9% on gains above $1M (Millionaires' Tax enacted 20263). No income tax on wages.
- TX / FL / NV / WY: No state capital gains tax.
Related reading
Get a personalized diversification plan
This calculator models even annual sales with no stock price growth and no interaction with ISOs, AMT, or estate planning. A real plan accounts for all of that: 10b5-1 schedules, exchange fund eligibility, direct-indexing SMA setup, and multi-year tax projections. Get matched with a specialist who builds these plans.
Sources
- IRS Rev. Proc. 2025-32 (inflation adjustments for 2026); confirmed via Kiplinger: IRS Updates Capital Gains Tax Thresholds for 2026. 2026 LTCG thresholds: single 0%/$49,450, 15%/$545,500; MFJ 0%/$98,900, 15%/$613,700.
- IRC § 1411 — Net Investment Income Tax: 3.8% on net investment income for single filers with MAGI over $200,000; MFJ over $250,000. Thresholds are NOT inflation-adjusted. See IRS Topic No. 559.
- Washington State capital gains tax: 7% on net LTCG over the annual deduction (~$262,050 for 2026, inflation-adjusted). 9.9% Millionaires' Tax on gains over $1M enacted March 2026. See WA Dept. of Revenue — Capital Gains Tax.
- Tax Foundation: 2026 Tax Brackets and Federal Income Tax Rates — cross-reference for all bracket values. Values verified April 2026.