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Capital Gains Tax in Texas
By Priya Raman
No income tax at the state level means the federal number is the whole story.
No income tax at the state level means the federal number is the whole story.
Texas never adopted a personal income tax, and capital gains ride along with everything else that goes untaxed at the state line. Sell an investment property here and the only bill comes from the IRS, not the state: up to 23.8% between the federal long-term rate and the NIIT surcharge.
There's no state form to fill out for capital gains in Texas because there's no state income tax at all. Everything an investor owes on a property sale runs through the federal return, topping out at 23.8% combined.
Run a hypothetical $250,000 gain through the numbers and the federal-only 23.8% ceiling comes to roughly $59,500, no state return required. Actual liability still depends on income level, basis, and any depreciation recapture, so treat this as scale, not a quote.
Reinvest that same $59,500 worth of tax exposure into a replacement property through a 1031 exchange and it simply doesn't come due yet. Texas adds nothing beyond the standard federal timeline: identify within 45 days, close within 180. Map it out in the 1031 exchange calculator and track both dates with the timeline calculator.