Iowa's top income tax rate on capital gains reaches 5.70%, bringing the combined investment property figure to 29.5% (20% federal + 3.8% NIIT + 5.70% state). Iowa has been gradually cutting its rates, so confirm the current figure with your CPA.
Iowa taxes capital gains as ordinary income at up to 5.70% at the state level. Combined with federal, you are at 29.5%. Estimate the full bill with depreciation recapture in the capital gains tax calculator.
A 1031 exchange can defer the combined 29.5% rate by reinvesting all proceeds into a replacement property. Model it in the 1031 exchange calculator and track your deadlines with the timeline calculator.