Understanding the implications of capital gains tax is essential for individuals engaged in comprehensive estate planning. A common question in Tennessee arises: “Does Tennessee have a capital gains tax?”
Kingsport CPA, PC, tax professionals explore the capital gains tax concept and explore whether it applies to Tennessee residents. We are a trusted resource across Northeast Tennessee that can clarify the specifics of how federal and state taxes impact you and how to plan accordingly.
What is Capital Gains Tax?
Capital gains tax is a levy imposed on the profits earned from the sale of assets such as stocks, real estate, or valuable personal possessions. When an asset’s selling price exceeds its original purchase price, the resulting profit is considered a capital gain, subject to taxation by the federal and some state governments.
Capital Gains Tax in Tennessee
In Tennessee, residents do not have to pay state-level taxes on capital gains. While this exemption does not apply to federal taxes, it means that residents in Tennessee are exempt from state-level capital gains taxes. Eight other states do not impose this tax, including:
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Texas
- Washington
- Wyoming
All of Tennessee’s neighboring states have a state-level tax on capital gains, with Arkansas and South Carolina having the highest state tax rate at 7%.
Federal Capital Gains Tax
While Tennessee does not have a specific capital gains tax, the federal government does tax realized capital gains on the sale of notable property or assets.
According to U.S. federal tax policy, the capital gains tax rate applies to profits from the sale of assets held for more than a year, known as long-term capital gains. The existing rates are 0%, 15%, or 20%, depending on the taxpayer’s tax bracket for that year.
Personal Accounting Services
Kingsport CPA, PC, provides accurate and up-to-date information regarding Tennessee and federal taxation. No matter your financial situation, our experienced public accountants are ready to help. We offer a wide range of tax, bookkeeping, and accounting services aimed at supporting your success and safeguarding your assets without you having to handle the financial details by yourself.
- Tax Planning
- Estate Planning
- Investing
- Bill Payments
- Account Reconciliation
- Tax Preparation and Filing
- Financial Consulting
- Audit Defense
If you need help understanding your tax documents, safeguarding your family’s assets with estate planning, or managing your bill payments to maintain financial control, our team is committed to supporting you. If you don’t find what you’re looking for listed above, please reach out to us today to see if we can still assist you.
Get Help with Estate Planning and Taxes from Kingsport CPA
Staying informed about the latest updates and changes in tax laws is crucial, as they can significantly impact estate planning and inheritance. Laws are subject to change, so it’s always best to consult with one of our qualified tax professionals for the most up-to-date information.
If you have specific inquiries about Tennessee’s inheritance tax laws or estate planning, we encourage you to get in touch with Kingsport CPA, PC. Our experienced professionals can offer personalized guidance tailored to your unique circumstances. We are also dedicated to keeping you informed about relevant laws so that your estate planning and taxation strategies align with the current laws and regulations.
Call (423) 239-5700 today or complete the online contact form to ask questions or request a no-cost, no-obligation consultation.
