Combined rate and how to defer it in Arkansas.
In Arkansas, the combined long-term capital gains rate on investment property can reach 28.2% (20% federal + 3.8% NIIT + 4.40% state), a figure worth deferring if you plan to stay in real estate.
Arkansas taxes capital gains at up to 4.40% at the state level, stacking on top of federal capital gains and NIIT. See the full estimate including depreciation recapture in the capital gains tax calculator.
A 1031 exchange lets you roll all proceeds into a replacement property and defer the 28.2% combined rate. Model it in the 1031 exchange calculator and check your deadlines in the timeline calculator.