2025 Capital Gains Tax Rates
Complete reference guide for federal and state capital gains tax rates on real estate sales
Federal Capital Gains Tax Rates (2025)
Long-term capital gains tax brackets for property held over 12 months
💑 Married Filing Jointly
| Income Range | Tax Rate |
|---|---|
| $0 - $94,050 | 0% |
| $94,051 - $583,750 | 15% |
| $583,751+ | 20% |
👤 Single
| Income Range | Tax Rate |
|---|---|
| $0 - $47,025 | 0% |
| $47,026 - $518,900 | 15% |
| $518,901+ | 20% |
👨👩👧👦 Head of Household
| Income Range | Tax Rate |
|---|---|
| $0 - $63,000 | 0% |
| $63,001 - $551,350 | 15% |
| $551,351+ | 20% |
📈 Additional Federal Taxes
🏢 Depreciation Recapture
Applied to depreciation claimed on rental properties
💼 Net Investment Income Tax (NIIT)
For high earners: $200K+ single, $250K+ married
State Capital Gains Tax Rates (2025)
State tax rates vary significantly - some states have no capital gains tax
🏖️ No State Capital Gains Tax (9 States)
*Washington has a 7% capital gains tax on high earners (over $262,000)
🏔️ Highest State Tax Rates (Over 8%)
📊 Complete State Tax Rates
| State | Tax Rate | Notes |
|---|
🏠 Primary Residence Exemption
Significant tax savings available for your primary home
👤 Single Taxpayers
Capital gains exemption on primary residence sale
💑 Married Couples
Capital gains exemption when filing jointly
📋 Requirements for Exemption
- ✅ Ownership Test: You must have owned the home for at least 2 years
- ✅ Use Test: You must have lived in the home as your primary residence for at least 2 of the last 5 years
- ✅ Frequency Limit: You can only use this exemption once every 2 years
- ✅ Both Spouses: Both spouses must meet the use test for the full $500,000 exemption
📚 Key Terms & Definitions
Long-Term Capital Gains
Profit from selling property owned for more than 12 months. Taxed at preferential rates (0%, 15%, or 20%).
Short-Term Capital Gains
Profit from selling property owned for 12 months or less. Taxed as ordinary income (up to 37%).
Adjusted Basis
Original purchase price plus improvements minus depreciation. Used to calculate your actual gain or loss.
Depreciation Recapture
Tax on depreciation previously claimed on rental properties, taxed at a flat 25% rate.
1031 Exchange
Strategy to defer capital gains tax by reinvesting proceeds into a "like-kind" property.
Cost Basis
Your total investment in the property, including purchase price, closing costs, and improvements.
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