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Capital Gains Tax in Arkansas
By Priya Raman
A quarter-million-dollar gain in Arkansas costs more than you'd guess.
A quarter-million-dollar gain in Arkansas costs more than you'd guess.
Arkansas taxes capital gains at up to 4.4% at the state level, on top of the federal 20% and the 3.8% net investment income tax. Combined, an investment property seller can face up to 28.2% of the gain.
The 28.2% ceiling applies to the taxable gain on the sale, not the full sale price, and depreciation recapture is calculated separately. See how your own numbers shake out in the capital gains tax calculator.
Take a hypothetical $250,000 gain on an Arkansas rental. At the 28.2% combined rate, that works out to roughly $70,500 owed before reinvestment, assuming no depreciation recapture is layered on top.
Reinvest the full proceeds into a like-kind property under Section 1031 and that $70,500 stays deferred rather than due. Model your own basis and timing in the 1031 exchange calculator and confirm your deadlines with the timeline calculator.