Home / Capital Gains Tax in California
Capital Gains Tax in California
By Priya Raman
The nation's steepest state rate turns a good sale into a smaller check.
The nation's steepest state rate turns a good sale into a smaller check.
California's 13.3% top rate is the highest of any state, and it stacks directly on top of the federal 20% and the 3.8% NIIT. A seller at the top bracket can watch 37.1% of the gain disappear before a dollar goes toward the next property.
13.3% is California's ceiling, reached at the state's highest income tier, and it applies to capital gains the same way it applies to wages. There's no reduced rate for long-term holds the way the federal code offers one. Run the exact figure, recapture included, through the capital gains tax calculator.
At 37.1% combined, the case for a 1031 exchange is about as strong as it gets anywhere in the country. Reinvest the full proceeds into like-kind property and none of that 37.1% comes due. Get your numbers into the 1031 exchange calculator and pin down your 45- and 180-day windows with the timeline calculator.
Before selling in California, walk through the 45- and 180-day timeline rules and what counts as like-kind property under Section 1031.