Capital gains holding period calculator

You have a gain and a date. This solves how far the position can fall before waiting for long-term treatment costs more than it saves, how likely that fall is over the days remaining, and what waiting is worth in expectation.

Worked example — Cushion before waiting stops paying: $4,250. On a $50,000 position with a $20,000 gain, 40 days to long-term treatment at 37.0%/20.0%, that is 8.5% of the position, and a 57.5% chance of trading through it before the date arrives.

Try:

Top bracket default: The page's own current default and worked example.

Days until it turns long termdUnrealised gain in it$Position value today$Short-term rate%Long-term rate%

Volatility

Advanced options 2

Exact volatility%Expected return while you wait%

Current resultHow far it can fall before waiting stops payingHow far it can fall before waiting stops paying: $4,250. 8.5% of the position, down to $45,750

The cushion is exact: sell now and you net the gain less the short-term rate, wait and you net the reduced gain less the long-term rate, and setting those equal gives the decline that makes you indifferent. The probabilities come from a lognormal price with the volatility and expected return you entered, and they are model output, not measurement.

Worth the risk: wait. Selling today costs $7,400 in tax and nets $42,600. Waiting saves $3,400 if the price does not move, and the position has a 58% chance of trading through the break-even level at some point in the next 40 days. One standard deviation of price movement over that time is 14.9%.

Vertical: relative likelihood of each price. Horizontal: position value on the day it turns long term. The shaded region is every outcome where waiting cost more than it saved.

The expected value of waiting is computed from the exact expectation of the long-term tax bill, which is the long-term rate applied to an option struck at your cost basis of $30,000. That is why it barely moves when the gain is large: the tax is owed in almost every path. Rates are taken as given and this page does not determine anyone's bracket.

Chance it finishes below break-even30.1%

Chance it touches the level at all57.5%

Typical shortfall if it does$4,012

Tax saved if the price is flat$3,400

Expected tax if you wait$4,000

Expected value of waiting+$3,400

How far can a stock fall before waiting for long-term gains stops paying off?

In plain English, the cushion is the tax saved by waiting, expressed as a price decline the position can absorb. Written exactly, x = G[1 − (1 − t_st) ÷ (1 − t_lt)]. On a $20,000 gain in a $50,000 position, here it is at real IRS bracket pairs, as a share of the position.

Cushion as a share of the position, by bracket pair
Short-term / long-term rate	Tolerable decline	Share of the position
37% / 20%	$4,250	8.5%
32% / 15%	$4,000	8.0%
24% / 15%	$2,118	4.2%
12% / 0%	$2,400	4.8%

The same decision at other volatilities

Volatility is the input almost nobody can supply from memory. On the default position and gain, here is the chance of touching the break-even level and the expected value of waiting at named volatility levels.

Sensitivity to volatility, 40 days to wait
Annualised volatility	Chance of touching break-even	Expected value of waiting
15%	7.7%	+$3,400
25%	29.6%	+$3,400
35%	46.3%	+$3,400
45%	57.5%	+$3,400
60%	68.3%	+$3,398
80%	76.9%	+$3,379
120%	85.8%	+$3,258

What this tool assumes

Both rates are inputs; this page encodes no holding-period rule, no bracket table, and no jurisdiction's law.

Price follows a lognormal random walk with the volatility and expected return you enter, not a description of any real stock.
No dividends, gap risk, or earnings dates inside the window.
No wash-sale interactions, and no hedging or collaring the position.
A loss position is excluded: the holding-period argument reverses, since a short-term loss offsets short-term gains at the higher rate.

The next question after this one

Tax loss harvesting calculatorCalculatorIf the position falls while you wait, the loss has its own value. This computes it, including the wash-sale case.Open next

What Pro adds here

Fat-tailed and jump price models, lot-level holding periods across a whole position, and hedged-wait scenarios are Pro features. The launch list sends one email at launch.