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Capital Gains Tax in Massachusetts
By Priya Raman
The millionaire's surtax is doing most of the damage here.
The millionaire's surtax is doing most of the damage here.
Massachusetts taxes most capital gains at a flat 5.00%, but income above $1 million picks up an additional 4% surtax, which is where the combined 32.8% figure comes from (20% federal + 3.8% NIIT + 9.00% state, assuming the surtax applies).
Whether an investor lands at 32.8% or something lower depends on whether the surtax kicks in. Here's the full stack assuming it does; the capital gains tax calculator can model a specific sale, including depreciation recapture, either way.
A 1031 exchange defers all of it, surtax included, by moving the sale proceeds into a replacement property rather than a cash payout. Model the swap in the 1031 exchange calculator and check your 45-day and 180-day windows in the timeline calculator.