21 — Capital Gain Tax Using Schedule D Tax Worksheet Updated for tax year 2025

What this line means

The tax on your capital gains calculated using the Schedule D Tax Worksheet, which applies different tax rates to different categories of gain: 0%/15%/20% for standard long-term gains, 25% for unrecaptured Section 1250 gain, and 28% for collectibles gains. This worksheet is required when lines 18 or 19 have amounts. Otherwise, use the simpler Qualified Dividends worksheet on line 20.

Does this apply to you?

• You have unrecaptured Section 1250 gain on line 18 (depreciation recapture from real estate)
• You have 28-percent rate gain on line 19 (collectibles or certain QSBS gains)
• You need to calculate tax with multiple gain rate categories

Easy to overlook

The worksheet stacks gain categories in a specific order The tax is computed by stacking income in layers: ordinary income first (taxed at regular rates), then 28% gain, then unrecaptured Section 1250 gain, then remaining long-term gain. The stacking order determines which income fills each rate bracket first, and getting the order wrong changes the total tax. ¹ [SOURCE: IRS Schedule D Tax Worksheet instructions]

You only use this worksheet OR line 20, never both If you are required to use the Schedule D Tax Worksheet (because lines 18 or 19 have amounts), you skip line 20 entirely. If lines 18 and 19 are both zero, you use line 20 and skip line 21. Completing both results in an incorrect tax calculation. ² [SOURCE: General filing pattern — multiple capital gain rate layers]

Watch out for this

Applying a single flat capital gains rate to all gains when multiple rate categories exist. A filer who sold both a rental property (25% recapture rate) and stocks (15% rate) needs this worksheet to apply the correct rate to each category. Using one rate for everything either overpays or underpays the tax owed.

Related lines on your return

• Line 20 — Schedule D — Qualified Dividends worksheet (simpler alternative when lines 18/19 are zero)
• Line 22 — Schedule D — Where the calculated tax goes
• Line 16 — Form 1040 — Tax; the amount from the worksheet ultimately flows here