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Capital Gains Tax in Indiana

Priya Raman
By Priya Raman

Indiana's flat rate keeps the state share small next to the federal bite.

Indiana taxes capital gains at a flat 3.05%, regardless of income. Combined with the federal 20% and the 3.8% NIIT, the ceiling on an investment property sale comes to 26.9%.

Deferring Indiana capital gains with a 1031 exchange

Reinvest the proceeds into qualifying like-kind property and the 26.9% combined rate doesn't come due now. Start planning in the 1031 exchange calculator and use the timeline calculator to track your 45-day identification window.

The rate you're deferring

20% federal, 3.8% NIIT, and Indiana's flat 3.05% make up that 26.9% figure. Depreciation recapture is calculated separately in the capital gains tax calculator.

Educational only. Indiana's flat rate is set by the legislature and subject to change; verify the current figure with a professional.

What this means for your sale

None of the Indiana math above accounts for closing costs, selling expenses, or basis adjustments specific to your property. Work through your actual Indiana numbers in the capital gains tax calculator.