How to Calculate Stock Profit
Gross Profit = (Sell Price − Buy Price) × Shares
Net Profit = Gross Profit − Buy Commission − Sell Commission − Tax
ROI % = (Net Profit ÷ Total Cost) × 100
Total cost = (Buy Price × Shares) + Buy Commission
Example: 100 shares of Apple bought at $150, sold at $210. $10 commission each side.
- Gross profit: ($210 − $150) × 100 = $6,000
- After commissions: $6,000 − $20 = $5,980
- After 15% long-term CGT: $5,980 − $897 = $5,083 net profit
- ROI: $5,083 ÷ ($150 × 100 + $10) = 33.8%
How Broker Fees Impact Your Returns
Many modern brokers offer commission-free trading for US stocks. But fees still appear in options, foreign stocks, and currency conversion:
| Broker | US Stocks | Options | Best For |
|---|---|---|---|
| Webull | $0 | $0 + $0.55/contract | Active traders |
| Fidelity | $0 | $0 + $0.65/contract | Long-term investors |
| Charles Schwab | $0 | $0 + $0.65/contract | All investors |
| Interactive Brokers | $0–$0.005/share | $0.15–$0.65/contract | International traders |
| eToro (UK/EU) | $0 | N/A | Beginners, copy trading |
| Hargreaves Lansdown (UK) | £11.95 | N/A | UK investors, ISA wrapper |
US Capital Gains Tax on Stocks 2026
The IRS taxes stock profits differently based on how long you held the shares:
| Filing Status | Income | Short-Term Rate | Long-Term Rate |
|---|---|---|---|
| Single | Up to $47,025 | 10%–22% | 0% |
| Single | $47,025–$518,900 | 22%–35% | 15% |
| Single | Over $518,900 | 37% | 20% |
| Married Filing Jointly | Up to $94,050 | 10%–22% | 0% |
| Married Filing Jointly | $94,050–$583,750 | 22%–35% | 15% |
Holding stocks for at least 366 days before selling converts short-term gains (taxed as ordinary income, up to 37%) into long-term gains (max 20%). On a $50,000 gain, this one decision saves up to $8,500 in federal taxes.
UK Capital Gains Tax on Stocks 2026/27
In the UK, profits from selling shares outside an ISA are subject to Capital Gains Tax:
- Annual CGT allowance: £3,000 (2026/27) — gains below this are tax-free
- Basic rate taxpayers: 18% on gains above allowance
- Higher/additional rate taxpayers: 24% on gains above allowance
- ISA wrapper: All gains completely tax-free — always use your £20,000 ISA allowance first
Calculate Your Exact Stock Profit & Tax
Enter your buy price, sell price, shares, commissions and tax rate. Get instant net profit and ROI.
Use Free Stock Calculator →Worked Examples
Example 1: S&P 500 ETF (VOO) — Long-Term Hold
Bought 50 shares of VOO at $380 ($19,000) in January 2023. Sold at $510 ($25,500) in February 2026. 3 years = long-term gains. $0 commission (Fidelity). 15% long-term CGT rate.
- Gross profit: $25,500 − $19,000 = $6,500
- Tax: $6,500 × 15% = $975
- Net profit: $5,525 | ROI: 29.1%
Example 2: Tesla — Short-Term Trade
Bought 20 shares at $250, sold 6 months later at $310. $10 commission each side. 32% marginal tax rate (short-term).
- Gross profit: ($310 − $250) × 20 = $1,200
- After commissions: $1,200 − $20 = $1,180
- Tax (32%): $1,180 × 0.32 = $378
- Net profit: $802 | ROI: 16.1% (vs 24% pre-tax)
How to Legally Minimize Your Stock Tax Bill
- Use tax-advantaged accounts — Roth IRA (US) and ISA (UK) allow all gains to grow completely tax-free. Priority #1.
- Hold for 12+ months — converts short-term to long-term rates, saving up to 17% in federal taxes.
- Tax-loss harvesting — sell losing positions to offset gains in the same tax year. A $5,000 loss offsets $5,000 of gains entirely.
- Donate appreciated stock to charity — you avoid CGT entirely and get a full market-value deduction.
- FIFO vs specific lot identification — choosing which shares to sell can significantly affect your taxable gain. Selling highest-cost shares first minimizes tax.
Frequently Asked Questions
Do I pay tax on unrealized stock gains?
No — in the US and UK, you only pay capital gains tax when you actually sell your shares and realize the gain. Unrealized gains (paper profits on shares you still hold) are not taxed. This is why long-term buy-and-hold investing is so tax-efficient — you can defer taxes indefinitely.
What is the wash-sale rule in the US?
The wash-sale rule prevents you from claiming a tax loss if you repurchase the same (or substantially identical) security within 30 days before or after the sale. If you want to tax-loss harvest while maintaining exposure, you must buy a different but similar ETF for at least 31 days. Note: this rule does not currently apply to cryptocurrency in the US.
Can I carry forward stock losses to future years?
Yes — in the US, if your capital losses exceed your capital gains in a year, you can deduct up to $3,000 against ordinary income and carry the rest forward to future tax years indefinitely. In the UK, losses can be carried forward indefinitely and offset against future capital gains.
Are dividends taxed differently than capital gains?
Yes. Qualified dividends in the US are taxed at long-term capital gains rates (0%, 15% or 20%). Non-qualified (ordinary) dividends are taxed as ordinary income. In the UK, dividends have a separate £500 annual allowance, with rates of 8.75% (basic), 33.75% (higher) and 39.35% (additional rate) above that allowance.