Combined rate and how to defer it in New Jersey.
New Jersey's top income tax rate of 10.75% on capital gains puts the combined investment property rate at 34.5% (20% federal + 3.8% NIIT + 10.75% state), one of the highest in the country.
New Jersey taxes capital gains as ordinary income at up to 10.75% at the state level, one of the highest rates in the country. Combined with federal, you reach 34.5%. See the full estimate with depreciation recapture in the capital gains tax calculator.
A 1031 like-kind exchange defers the 34.5% combined rate by reinvesting all proceeds into a qualifying replacement property. Model the numbers in the 1031 exchange calculator and track your deadlines with the timeline calculator.