What if?
The same sale under different choices, each computed by the engine rather than estimated. Figures are the tax on the gain, so the rows stay comparable when a variant spans two tax years. Select one to load it into the calculator and read its full derivation.
Estimates only — this is not tax advice. Consult a CPA or enrolled agent before acting on these figures. The calculator does not model the alternative minimum tax, wash sales, like-kind exchanges, QSBS, installment sales, or state additions and subtractions. See what is out of scope.
Show your work — 0 steps, each with its rule and citation
How District of Columbia taxes a capital gain
Statutory authority: DC Office of Tax and Revenue, individual income tax rates, table for tax years beginning after 31 December 2021 (retrieved 1 September 2026)
No state tax, and a district tax higher than most states charge
The District of Columbia is not a state, and a DC resident genuinely pays no state income tax. That fact is occasionally repeated as though it were good news. It is not: the District levies its own income tax in place of one, and the top rate is 10.75% — higher than every state except California and a small handful of others.
The ladder runs 4% on the first $10,000 of taxable income, then 6% to $40,000, 6.5% to $60,000, 8.5% to $250,000, 9.25% to $500,000, 9.75% to $1,000,000, and 10.75% above that.
For capital gains the practically important step is the one at $60,000, where the rate jumps from 6.5% to 8.5% — a two-point rise in a single transition. Most filers with a salary and a gain of any size are above it, and much of a large gain will sit in the 8.5% and 9.25% bands.
One table for every filing status
The District applies a single rate table to all filers. There is no separate schedule for a married couple, a head of household or a married filer filing separately, and no doubling of the thresholds for a joint return.
The consequence mirrors Delaware’s: a couple reaches each rate at the same dollar figure a single filer does, so a joint return crosses the 8.5% step at $60,000 of household taxable income rather than $120,000. Anyone reasoning from federal brackets, where the joint thresholds are broadly double, will place the DC transitions in the wrong place.
Fixed since 2022, and drifting in real terms
The Office of Tax and Revenue publishes this table for tax years beginning after 31 December 2021, with no closing date and no indexing provision. The thresholds have been the same nominal figures for four years.
That is a shorter freeze than Delaware’s decade or Virginia’s thirty-odd years, but it works the same way. The $1,000,000 top threshold in particular is a figure that only inflation needs to erode: a one-off gain on a long-held property or a business sale can cross it in a single year, and the 10.75% band was written for a level of income that is slightly less exceptional each year it stays put.
A high rate makes federal timing worth more, not less
One practical observation for DC residents. Because the district layer is large — approaching a tenth of a gain at the top — the combined federal and district burden on a realised gain is among the heaviest in the country, and anything that defers or reduces the federal component is worth proportionally more here.
Holding an asset past the one-year mark, using the Section 121 exclusion on a main home, and offsetting with realised losses all work exactly as they do anywhere else. What does NOT work is bracket management within the district ladder: the bands below 8.5% are narrow enough that an ordinary salary has passed them, so splitting a sale across years rarely moves the district figure.
The gain being taxed as ordinary income also means a short-term sale is punished twice: at the federal ordinary rate and at the district rate that would have applied regardless. The holding period is worth nothing to the District and a great deal federally.
The regional spread is the widest in the country
The Washington commuter region spans three jurisdictions with genuinely different tax treatment, and the gap between them is unusually large for such a small area.
A DC resident selling a large holding faces a top rate of 10.75%. Cross the Potomac into Virginia and the top rate is 5.75% — barely half — and it arrives at just $17,000 of taxable income, so a Virginia filer with a gain pays that rate on essentially all of it. On a $500,000 gain the difference between the two jurisdictions runs to tens of thousands of dollars.
Maryland is the third leg and this calculator cannot yet compute it. Its state ladder is verified but the bracket thresholds have not been captured, and Maryland counties levy a separate local income tax on top that also reaches capital gains. Rather than produce a Maryland figure that would be short by the county layer, the calculator declines and says so.
None of this is advice to move. Residency for tax purposes is a question of fact that a revenue department will test, and a gain sourced to property in a jurisdiction can remain taxable there. It is a reason to compute the actual figure for your own situation before assuming the difference is small.
What the District does not change
The District gives capital gains no preferential treatment and no exclusion for long-held assets, and there is no additional local layer beneath it — the district tax is the whole non-federal answer.
The federal calculation is identical to what it would be in any state. The District layer is added to it, not substituted for it, which is why a DC sale can attract a combined burden that neither figure suggests on its own.
The figure here stacks your gain on federal ordinary taxable income. The District computes its own taxable income with its own standard deduction and credits, which are not modelled, so treat the number as close for a straightforward wage-and-sale situation and approximate otherwise.
A worked District of Columbia example
Every figure below is computed by the same engine that powers the calculator above, at the moment this page was built — not typed in by hand. When the tax-year data is updated, this example updates with it.
A $400,000 gain on a $150,000 salary
A single filer in the District earning $150,000 sells long-held shares for a $400,000 gain. The gain spans the 8.5%, 9.25% and 9.75% bands.
- Taxable income after deduction
- $533,900
- Taxable gain
- $400,000
- Tax owed without the sale
- $24,734
- Tax the sale added
- $73,300
- of which net investment income tax
- $13,300
- Total federal tax
- $98,034
- District of Columbia state tax
- $36,298.75
- Effective rate on the gain
- 18.33%
The effective district rate on this gain lands around 9%, because the sale is large enough to climb through three bands. Added to the federal bill, the District takes roughly as much again as the federal long-term rate does.
Caveats on this example (2)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
- District of Columbia: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
Show the working — 14 steps, each with its citation
- Net short-term capital gain or loss for the year$0
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$400,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $550,000 less $16,100.
- Taxable income$533,900
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$1,240
$12,400 of taxable income between $0 and $12,400.
- Ordinary income taxed at 12%$4,560
$38,000 of taxable income between $12,400 and $50,400.
- Ordinary income taxed at 22%$12,166
$55,300 of taxable income between $50,400 and $105,700.
- Ordinary income taxed at 24%$6,768
$28,200 of taxable income between $105,700 and $133,900.
- Ordinary income stacked below the long-term gain$133,900
Long-term gain is taxed by reference to where it sits ON TOP of $133,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$60,000
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $550,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax at 3.8%$13,300
3.8% of $350,000, the lesser of net investment income ($400,000) and the amount by which modified AGI exceeds the threshold ($350,000). Here the binding figure is the excess of modified AGI over the threshold.
- District of Columbia income tax on the gain$36,298.75
$400,000 stacked on $133,900 of other taxable income across a 7-bracket ladder topping out at 10.75%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$134,332.75
$134,332.75 on $550,000 of total income, an effective rate of 24.42%.
What this calculator does not cover for District of Columbia
The District of Columbia figure stacks your gain on your federal ordinary taxable income. District of Columbia computes its own taxable income with its own additions and subtractions, which are not modelled here — so treat the state number as a close approximation for a straightforward wage-and-sale situation, and as a rough one if your return carries significant state adjustments.
Full-year residency is assumed throughout. Part-year residents, non-residents, and gains sourced to property in another state all turn on rules this calculator does not model. The complete list of what is in and out of scope is on the methodology page.
Other states
- VirginiaTop rate of 5.75% from just $17,000, on 1990 thresholds.
- DelawareSix brackets to 6.6%, on thresholds frozen since 2014.
- New JerseyOrdinary income to 10.75%. Fixed thresholds, and no loss carryforward.
See the full 2026 capital gains guide for the federal rules that apply wherever you live — the rate ladder, the net investment income tax, the home-sale exclusion and depreciation recapture — plus every state we currently cover.