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Capital Gains Tax in Rhode Island
By Priya Raman
Rhode Island's rate sits just under 6%, and it adds up fast on a big gain.
Rhode Island's rate sits just under 6%, and it adds up fast on a big gain.
Rhode Island taxes capital gains as ordinary income at up to 5.99% at the state's top bracket. Combined with the federal 20% rate and the 3.8% NIIT, an investment property seller is looking at a ceiling of 29.8% on the gain.
There's no carve-out for capital gains in Rhode Island; the state's top income bracket, 5.99%, applies directly. Stack that on federal and NIIT and the combined maximum lands at 29.8%.
On a hypothetical $250,000 gain, Rhode Island's 29.8% combined rate works out to about $74,500 owed across federal and state, before any recapture adjustments or credits specific to the seller. It's a rough sketch meant to show scale, not a number to file with.
A 1031 exchange defers that $74,500 estimate by rolling the sale proceeds into a new like-kind property instead of taking cash. Rhode Island doesn't layer extra state requirements onto the federal exchange rules. Sketch out the swap in the 1031 exchange calculator and check the 45- and 180-day windows in the timeline calculator.