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Capital Gains Tax in Hawaii
By Priya Raman
Hawaii's 11% state rate makes this one of the priciest sales in the country.
Hawaii's 11% state rate makes this one of the priciest sales in the country.
Hawaii taxes capital gains at up to 11% at the state level, one of the highest rates outside California. Combined with the federal 20% and the 3.8% NIIT, a seller can lose up to 34.8% of the gain.
That 34.8% ceiling reflects the state's top bracket and applies to the taxable gain, not the sale price. Check what depreciation recapture adds on top of it in the capital gains tax calculator.
A $250,000 gain is a reasonable stand-in for a mid-size Hawaii investment sale. Multiply that by the 34.8% combined rate and the number comes to roughly $87,000, recapture aside.
None of that $87,000 is owed up front if the sale proceeds go into a like-kind replacement property under a 1031 exchange. Work through your own numbers in the 1031 exchange calculator and confirm your deadlines with the timeline calculator.