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Capital Gains Tax in North Dakota
By Priya Raman
A 2.50% state rate keeps North Dakota near the bottom of the national range.
A 2.50% state rate keeps North Dakota near the bottom of the national range.
North Dakota keeps its bite on capital gains modest. A 2.50% state rate stacked on the federal 20% and the 3.8% net investment income tax puts the ceiling at 26.3% on an investment property sale, well under what sellers pay in most of the country.
A 1031 exchange lets a seller roll the entire proceeds of a sale into a new like-kind property and push the tax bill down the road instead of paying it now. North Dakota follows the federal rules on this one; there's no separate state-level exchange process to track. Work through the mechanics of a swap in the 1031 exchange calculator, then pull your 45-day identification and 180-day closing dates from the timeline calculator.
North Dakota taxes capital gains as ordinary income, so the 2.50% figure sits at the top end of the state's income tax brackets. Add the federal long-term rate and the NIIT surcharge and an investor selling appreciated property is looking at up to 26.3% of the gain. Run your own numbers, with depreciation recapture factored in, through the capital gains tax calculator.
Selling in North Dakota does not change the federal 45-day and 180-day exchange clock; only the state's share of the total rate shifts. Model your own North Dakota numbers in the timeline calculator.