Combined rate and how to defer it in Massachusetts.
Massachusetts taxes long-term capital gains at 5.00% for most filers, but adds a 4% surtax on income above $1 million, which can push the effective state rate to 9.00% and the combined investment property rate to 32.8% (20% federal + 3.8% NIIT + 9.00% state).
Massachusetts taxes capital gains at 5.00% for most filers, with a 4% surtax kicking in above $1 million in income, for a potential combined state rate of 9.00%. See the full estimate with depreciation recapture in the capital gains tax calculator.
A 1031 like-kind exchange defers the combined 32.8% rate by reinvesting all proceeds into a replacement property. Model your numbers in the 1031 exchange calculator and check your deadlines with the timeline calculator.