Capital Gains Tax in Wisconsin

Wisconsin taxes capital gains as ordinary income, and its top bracket runs to 7.65%. Combined with the federal 20% rate and the 3.8% NIIT, an investment property seller faces a ceiling of 31.5%, one of the higher totals in the Midwest.

Wisconsin's capital gains rate, broken down

That 31.5% figure is three separate taxes stacked together:

• Federal capital gains tax: 20%
• Net investment income tax (NIIT): 3.8%
• Wisconsin state income tax: 7.65%

Where the 1031 exchange fits

A 1031 exchange defers all three pieces at once by reinvesting the full sale proceeds into qualifying replacement property. Wisconsin doesn't add its own requirements on top of the federal exchange rules. Sketch the swap in the 1031 exchange calculator and track the 45-day identification and 180-day closing windows with the timeline calculator.

Things to know before you exchange

• Wisconsin does not run a separate 1031 program; the deferral above comes entirely from federal Section 1031.
• A qualified intermediary has to hold your proceeds before a Wisconsin sale can qualify.