Roth Conversion + Capital Gains Calculator (2026)
A Roth conversion raises the ordinary income floor under your long-term capital gains. If it pushes enough of your stack above the 0% LTCG ceiling, gains that would have been tax-free suddenly cost you 15%. This calculator shows the exact interaction — and the maximum conversion you can do before that shift happens.
How LTCG stacking works
The IRS calculates your tax in two layers. First, ordinary income (wages, IRA withdrawals, Roth conversions, pension, most interest) fills the bottom of the stack. Long-term capital gains and qualified dividends sit on top. Each dollar of capital gain is taxed at the rate that applies to wherever it falls in the combined stack.
The 0% LTCG rate applies to gains that fall below the threshold — $98,900 of taxable income for MFJ filers, $49,450 for single filers in 2026. Once the ordinary income floor rises above that ceiling (because of a Roth conversion), the capital gains sitting on top are now in the 15% zone.
2026 long-term capital gains brackets
| Rate | Single (taxable income) | Married Filing Jointly |
|---|---|---|
| 0% | Up to $49,450 | Up to $98,900 |
| 15% | $49,451 – $545,450 | $98,901 – $613,700 |
| 20% | Above $545,450 | Above $613,700 |
Source: IRS Rev. Proc. 2025-32; Kiplinger 2026 capital gains tax brackets. Thresholds apply to taxable income (gross income minus deductions), not gross income.
The 2026 standard deduction
The standard deduction reduces ordinary income before the LTCG stack is calculated, which gives capital gains more room in the 0% zone. For 2026:
- MFJ: $32,200 base, plus $1,650 for each spouse age 65 or older
- Single: $16,100 base, plus $1,650 if age 65 or older
A couple where both spouses are 65+ uses a $35,500 standard deduction — giving $35,500 more space before LTCG starts rising in the stack.1
Three ways to coordinate conversions and capital gains in the same year
1. Convert before you harvest gains
Run this calculator before realizing any capital gains. If your planned conversion would push LTCG into the 15% bracket, you can decide in advance: reduce the conversion, delay the harvest, or plan the harvest for a different year when you're doing fewer conversions.
2. Separate the years
For a retiree in the golden window (roughly 60–73), there's often flexibility on timing. Convert heavily in years when capital gains are small or zero. Harvest gains in years when conversions are smaller. The two-year IRMAA lookback means you already need a multi-year conversion calendar — folding in capital gains timing is a natural extension.
3. Intentionally cross the 0% threshold — with eyes open
Sometimes it's worth it. If you have a large unrealized gain you want to take now (selling a business, settling an estate, rebalancing a concentrated position), the 15% rate on capital gains may be worth paying alongside the conversion. The question is whether the lifetime Roth conversion savings justify the one-year capital gains cost. This calculator shows you the interaction cost; your advisor models whether the lifetime math works.
Frequently asked questions
How does a Roth conversion affect long-term capital gains taxes?
A Roth conversion adds ordinary income to your return, raising the floor under your long-term capital gains. The IRS taxes capital gains on top of ordinary income — if a conversion pushes ordinary income above the 0% LTCG threshold ($98,900 MFJ / $49,450 single in 2026), gains shift from 0% to 15%. The interaction cost is the extra capital gains tax created by that shift, on top of ordinary income tax on the conversion itself.
What is the 0% capital gains bracket threshold in 2026?
Long-term capital gains are taxed at 0% if total taxable income falls below $98,900 for married filing jointly or $49,450 for single filers in 2026 (IRS Rev. Proc. 2025-32). A Roth conversion increases ordinary income, reducing room under the 0% ceiling for your capital gains. Standard deductions help preserve that room — $35,500 for a couple where both spouses are 65 or older.
Can I do a Roth conversion and still pay 0% capital gains tax?
Yes — if your ordinary income after conversion stays below the 0% LTCG threshold minus your capital gains amount. This calculator's "safe ceiling" result shows the maximum conversion that keeps all gains tax-free. Many retirees with moderate pensions or Social Security can convert meaningfully while preserving the 0% capital gains rate.
Should I harvest capital gains before or after doing a Roth conversion?
Plan the conversion amount first, then decide whether to harvest gains in the same year. In years with large conversions, delaying gain harvesting or scheduling it in a separate year is often more tax-efficient. For retirees in a multi-year golden window, separating heavy conversion years from large capital-gains events is a common specialist strategy.
What other tax layers should I consider beyond capital gains interaction?
The capital gains interaction is one of four tax layers on Roth conversions. A large conversion can also trigger Medicare IRMAA surcharges (starting at $218,000 MAGI for MFJ in 2026), push more Social Security into taxation via IRC § 86 phase-in zones, and add state income tax. This calculator models only the federal capital gains interaction. A fee-only advisor models all four layers simultaneously.
Does NUA (Net Unrealized Appreciation) interact with Roth conversions the same way?
Yes — NUA on employer stock taken as a lump-sum distribution is taxed at long-term capital gains rates, so it stacks on ordinary income the same way. NUA distributions typically create a high-income year that conflicts with large Roth conversions. Most advisors recommend sequencing NUA distributions and heavy conversion years separately to avoid stacking both events in the same tax year.
Related calculators and guides
- Roth Conversions and Capital Gains: How They Interact — the full guide with worked examples
- IRMAA-Aware Roth Conversion Calculator — find the IRMAA cliff near your income
- Tax Bracket Filling Calculator — how much room you have in each bracket
- Lifetime Roth Conversion Calculator — NPV model over 20+ years
Have a specialist model conversion + capital gains timing across all your years
This calculator handles one year. The optimal strategy coordinates conversions, capital gain harvesting, IRMAA tiers, Social Security timing, and RMD projections across a 5–15 year window. A fee-only Roth conversion specialist builds that model for your specific numbers. Free match, no obligation.
Sources
- IRS Rev. Proc. 2025-32 — 2026 tax brackets, standard deductions, and LTCG thresholds.
- Kiplinger — IRS Updates Capital Gains Tax Thresholds for 2026 — LTCG bracket amounts confirmed.
- Tax Foundation — 2026 Tax Brackets and Federal Income Tax Rates — cross-reference for ordinary income brackets.
- IRS Publication 550 — Investment Income and Expenses — LTCG stacking and qualified dividends treatment.
Tax values verified as of June 2026 against 2026 IRS Rev. Proc. 2025-32 and Kiplinger reporting.