How does Idaho tax capital gains?

Idaho does not have a separate capital gains rate. Capital gains are taxed as ordinary income at Idaho's flat 5.8% rate. However, Idaho allows a 60% capital gains deduction on net gains from qualifying Idaho property — such as revenue-producing real estate, certain timber, and tangible personal property used in an Idaho business — held for the required period. That deduction means only 40% of a qualifying gain is taxed.

What qualifies for the Idaho 60% capital gains deduction?

The 60% deduction applies to net capital gains from the sale of qualifying Idaho property held for a minimum period (generally 12 months for some property and longer for real estate). Qualifying property includes Idaho real property, tangible personal property used in an Idaho trade or business, and certain timber and cattle/horses. Publicly traded stocks and out-of-state property generally do not qualify.

What is the federal capital gains rate?

Long-term capital gains (assets held over one year) are taxed federally at 0%, 15%, or 20% depending on your taxable income. Short-term gains (held one year or less) are taxed as ordinary income at your marginal federal bracket. This calculator lets you pick the long-term bracket or enter your ordinary rate for short-term gains.

Are federal and Idaho taxes added together?

Yes. Your total capital gains tax is the federal capital gains tax plus the Idaho state tax. This calculator shows each separately and then totals them, so you can see the combined burden and your effective rate on the gain.

Is this an exact figure?

No. It is an estimate. Actual liability depends on your full taxable income, the net investment income tax (3.8% for high earners), whether your gain truly qualifies for the Idaho deduction, and offsetting capital losses. Confirm qualification and rates with a tax professional or the Idaho State Tax Commission.

Idaho Capital Gains Tax Calculator 2024

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How Idaho taxes capital gains

Idaho has no preferential capital gains rate — gains flow into the flat 5.8% income tax like any other income. What Idaho does offer is a 60% capital gains deduction on net gains from qualifying Idaho property (revenue-producing real estate, business personal property, certain timber and livestock) held for the required period. When the deduction applies, only 40% of the gain reaches Idaho tax. Federally, the holding period still matters: long-term gains get the 0/15/20% rates while short-term gains are taxed as ordinary income.

How it works

The calculator computes the federal and Idaho layers independently:

federal tax = gain x federal rate (LTCG 0/15/20% or ordinary for short-term)
idaho taxable = qualifies ? gain x 40% : gain
idaho tax   = idaho taxable x 5.8%
total       = federal tax + idaho tax

The Idaho 60% deduction only reduces the Idaho portion — it has no effect on your federal tax. Short-term gains never qualify for the long-term federal rates, so you would enter your ordinary federal marginal rate for those.

Example and notes

A $50,000 long-term gain on qualifying Idaho farmland, federal 15% bracket, Idaho deduction applied:

federal tax  = $50,000 x 0.15 = $7,500
idaho taxable= $50,000 x 0.40 = $20,000   (60% deducted)
idaho tax    = $20,000 x 0.058 = $1,160
total        = $8,660

The same gain on publicly traded stock (no Idaho deduction):

idaho taxable= $50,000
idaho tax    = $50,000 x 0.058 = $2,900
total        = $7,500 + $2,900 = $10,400

Note: Whether a gain qualifies for the 60% deduction is fact-specific (property type and holding period). High earners may also owe the 3.8% federal net investment income tax, which is not modeled here. Use this for planning, then confirm with a tax professional.