Arizona Capital Gains Tax Calculator - Federal and Arizona 2.5% State

The Arizona capital gains tax calculator estimates the tax on a profit from selling an investment, home, or other capital asset when you live in Arizona. Arizona taxes capital gains as ordinary income, so the state portion of your gain is a flat 2.5%, while the federal portion follows the long-term 0/15/20% rules or your ordinary brackets for short-term gains. This calculator stacks both layers and adds the 3.8% net investment income tax when your income is high enough.

• • Selling brokerage investments: Estimate the combined federal and Arizona 2.5% tax before you decide how much to liquidate.
• • Realizing a gain on a second home: See the Arizona state tax on top of the federal bill for a property sale.
• • Comparing a short vs long hold: Check how holding past one year changes the federal rate while Arizona stays at 2.5%.
• • Planning around the NIIT threshold: Find out whether your modified adjusted gross income crosses the 3.8% net investment income tax line.

A capital gain is the difference between what you sold an asset for and what you paid for it, including improvement and closing costs in your basis.

Because Arizona taxes the gain at a flat 2.5% on top of whatever the federal side charges, the total is higher than in states with no income tax, and the Arizona layer does not shrink just because you held the asset for the long term.

To see how the 2.5% state layer fits into your annual return, open the Arizona income tax calculator.

The calculator builds the result in a few steps: it finds the realized gain, applies the correct federal rate, layers on the Arizona flat 2.5% state tax, and then adds the 3.8% net investment income tax when your income is high enough. The exact bracket thresholds come from IRS guidance for the current tax year.

• saleProceeds: The gross amount received when the asset was sold.
• costBasis: Original purchase price plus improvements and allowable fees.
• holdingPeriod: Long-term (over one year) uses 0/15/20% rates; short-term uses ordinary income brackets.
• filingStatus: Picks the federal rate brackets and the net investment income tax threshold.
• federalTaxableIncome: Other income for the year that determines which long-term bracket the gain lands in.
• magi: Modified adjusted gross income used to test the 3.8% net investment income tax.

Long-term gains are taxed progressively: for tax year 2025 a single filer pays 0% up to $48,350 of total income, 15% up to $533,400, and 20% above that, so a large gain can span two brackets.

Short-term gains skip the preferential rates and are added to your ordinary income, which can push part of the gain into a higher marginal bracket. The Arizona 2.5% rate then applies to the whole gain regardless of which path the federal side takes.

According to IRS Tax Topic No. 409, long-term capital gains are taxed at 0%, 15%, or 20% depending on your taxable income, while short-term gains are taxed as ordinary income.

As published by IRS Rev. Proc. 2024-40, the 2025 long-term capital gains bracket thresholds for a single filer are $48,350 and $533,400.

For a version that compares the federal result across states, open the US capital gains tax calculator.

Four ideas drive the number: the holding-period split, the federal preferential brackets, the net investment income tax, and Arizona's flat 2.5% state rate.

The blended long-term rate is usually below the top 20% mark because the first slice of gain falls into the lower brackets.

Arizona's flat 2.5% is the main reason a gain here costs more than the same gain in a state that does not tax investment income, but less than a state with a higher top rate.

The brackets that set your short-term rate are the same ones modeled in the federal income tax calculator.

Enter your sale details and income, then read the federal result with the Arizona 2.5% state layer added.

1. 1 Enter sale proceeds and cost basis: Put the amount you sold the asset for and what you paid plus improvements and fees.
2. 2 Pick the holding period: Choose long-term if you held the asset more than one year, otherwise short-term.
3. 3 Select your filing status: This sets the federal brackets and the net investment income tax threshold.
4. 4 Add your other income and MAGI: Enter remaining taxable income and modified adjusted gross income to place the gain and test for the 3.8% tax.
5. 5 Read the result: Note the federal tax, any net investment income tax, the Arizona 2.5% state tax, and the effective rate.

A single Arizona resident with $60,000 of other income who sells for $50,000 an asset that cost $30,000 sees a $20,000 long-term gain taxed at 15% federally, with a $500 Arizona 2.5% state tax and a total of $3,500.

After the sale, see how the gain flows into take-home pay with the Arizona paycheck calculator.

The tool turns federal bracket tables and the Arizona 2.5% rate into a single number you can plan around.

• • Shows the full Arizona cost: It makes the 2.5% state layer explicit so you do not miss the state bill that applies here but not in states like Alaska.
• • Handles blended federal brackets: Large gains that cross the 15% and 20% lines are split correctly instead of rounded to one rate.
• • Flags the NIIT: It warns you when modified adjusted gross income crosses the 3.8% net investment income tax threshold.
• • Compares hold lengths: Switching the holding period shows the gap between ordinary-income and preferential federal rates while Arizona stays flat.

Planning a sale around the one-year mark is easier when you can see the rate change before you commit.

Because the Arizona 2.5% layer is flat, the state part of the bill is predictable even when the federal part swings with your income.

For a state that uses the federal brackets at the state level, compare the Alabama capital gains tax calculator.

Several inputs move the result, and a few situations are outside a simple estimate.

• • The estimate ignores state capital gains taxes from other states, which matter if you moved during the year or the asset sits in another state.
• • It does not model the home sale exclusion, loss carryforwards, or the alternative minimum tax.
• • Rates shown reflect the current IRS tables and the Arizona flat 2.5% rate and should be confirmed against your return or a tax professional.

A home sale can qualify for an exclusion of up to $250,000 ($500,000 married) of gain, which would lower the taxable amount below what you enter here.

If you realize a loss, the calculator reports zero tax because a loss does not create a current capital gains bill, though it may offset other gains.

According to Arizona Department of Revenue, Arizona levies a single flat individual income tax rate of 2.5%, and capital gains are included in Arizona taxable income.

Investment income subject to the same 3.8% net investment income tax is modeled in the dividend tax calculator.