Combined rate and how to defer it in Minnesota.
Minnesota's top income tax rate of 9.85% on capital gains is one of the highest in the Midwest, pushing the combined investment property figure to 33.6% (20% federal + 3.8% NIIT + 9.85% state).
Minnesota taxes capital gains as ordinary income at up to 9.85% at the state level, one of the higher rates in the region. Combined with federal, the total reaches 33.6%. See the full estimate in the capital gains tax calculator.
A 1031 like-kind exchange defers the combined 33.6% rate by rolling all proceeds into a qualifying replacement property. Model the exchange in the 1031 exchange calculator and get your 45-day and 180-day deadlines from the timeline calculator.