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Capital Gains Tax in South Carolina
By Priya Raman
South Carolina's 6.40% top rate pushes the combined figure past 30%.
South Carolina's 6.40% top rate pushes the combined figure past 30%.
South Carolina taxes capital gains as ordinary income, topping out at 6.40% for the state's highest bracket. Layered onto the federal 20% and the 3.8% NIIT, an investment property seller faces a combined ceiling of 30.2%, higher than most of the Southeast.
South Carolina doesn't offer a preferential rate for capital gains; they're taxed the same as wage income, up to 6.40% at the top bracket. Combined with federal and NIIT, the total reaches 30.2% of the gain. For the specific number on a sale, including depreciation recapture, the capital gains tax calculator does the arithmetic.
A 1031 exchange in South Carolina defers the full 30.2%, state and federal together, provided the entire sale amount goes into a qualifying replacement property. The state doesn't require anything beyond what the IRS already asks for. Map out the exchange in the 1031 exchange calculator, and pull your 45-day and 180-day dates from the timeline calculator.
South Carolina sellers weighing their options can also read 1031 exchange vs. paying capital gains now and what a qualified intermediary does.