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Capital Gains Tax in Arizona
By Priya Raman
Arizona's state bite is small, but the federal side still adds up fast.
Arizona's state bite is small, but the federal side still adds up fast.
Arizona keeps its own capital gains rate modest at 2.5%, one of the lower state rates in the country. Stack the federal 20% and the 3.8% NIIT on top and the combined ceiling still reaches 26.3%.
A 1031 like-kind exchange lets an Arizona investor roll the entire gain into a new property instead of paying the 26.3% now. Work through your own basis and reinvestment amount in the 1031 exchange calculator, then lock in your 45-day identification and 180-day closing windows with the timeline calculator.
That 26.3% is federal 20% plus 3.8% NIIT plus Arizona's 2.5%, all applied to the taxable gain, not the sale price. Check what depreciation recapture adds to that figure in the capital gains tax calculator.
Selling in Arizona does not change the federal 45-day and 180-day exchange clock; only the state's share of the total rate shifts. Model your own Arizona numbers in the timeline calculator.