Capital Gains Tax in New Jersey

New Jersey's top state income tax rate, 10.75%, applies fully to capital gains, and it's one of the highest state rates in the country. Combined with federal and NIIT, an investment property sale can reach 34.5%.

Deferring New Jersey capital gains with a 1031 exchange

At a combined 34.5%, the case for deferral is stronger here than in most states. A 1031 exchange defers the entire rate, New Jersey's share included, by moving sale proceeds directly into a replacement property. Structure the swap in the 1031 exchange calculator and pin down your 45-day and 180-day windows with the timeline calculator.

The rate you're deferring

New Jersey taxes capital gains as ordinary income at up to 10.75%. Stack that against the federal 20% and the 3.8% NIIT and the total reaches 34.5%, among the steepest combined figures nationally. See what a specific sale actually owes, depreciation recapture included, in the capital gains tax calculator.

What this means for your sale

None of the New Jersey math above accounts for closing costs, selling expenses, or basis adjustments specific to your property. Work through your actual New Jersey numbers in the capital gains tax calculator.