Combined rate and how to defer it in Alabama.
Selling investment property in Alabama means handing over a combined 28.8% in capital gains tax (20% federal + 3.8% NIIT + 5.00% state), unless you roll the proceeds into a replacement property instead.
Alabama taxes capital gains as ordinary income at up to 5.00%, added to the federal rate. Use the capital gains tax calculator to see the full bill including depreciation recapture.
A 1031 like-kind exchange lets you reinvest all proceeds and defer that combined 28.8% rate. See the deferred amount in the 1031 exchange calculator and your 45-day and 180-day deadlines in the timeline calculator.