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 Texas taxes a capital gain
Statutory authority: Tex. Const. art. VIII, § 24 (as amended 2019)
Texas does not tax capital gains, and cannot easily start
There is no Texas individual income tax, so there is no Texas capital gains tax. A gain realised by a Texas resident carries a state bill of exactly zero, whether it is $5,000 or $5,000,000, short-term or long-term, on shares or on a rental property.
This is unusually durable. In November 2019 Texas voters approved Proposition 4, amending Article VIII of the state constitution to prohibit a personal income tax outright. Repealing that bar would require another constitutional amendment and another statewide vote, not simply an act of the legislature. Planning around Texas residency rests on firmer ground than in states where the rate is merely low.
What you still owe
Everything federal. This is where the real bill is, and where the planning decisions actually live. Long-term gains are taxed at 0%, 15% or 20% depending on your total taxable income; short-term gains are taxed as ordinary income at up to 37%; and the 3.8% net investment income tax applies once modified AGI passes $200,000 single or $250,000 joint.
The federal Section 121 exclusion on a main home — $250,000 of gain, or $500,000 on a joint return — applies in Texas exactly as elsewhere, as does Section 1250 depreciation recapture at up to 25% on a rental sale. Being in a no-income-tax state does not exempt you from any of it.
The taxes Texas does levy, and why they are not this
Texas raises revenue through property tax, sales tax, and a franchise tax on business entities. None of these is a capital gains tax and none is triggered by selling shares.
The franchise tax is worth a specific note because it is occasionally confused for one: it applies to taxable entities on margin, not to individuals on investment gains. Selling stock from a personal brokerage account does not create a franchise tax obligation. Property tax is likewise a recurring tax on ownership, not a tax on the profit when you sell.
If you moved during the year
Residency is the whole question, and this calculator assumes full-year residency in the state you select. Moving to Texas partway through a year does not retroactively untax a gain realised while you were resident somewhere else — states generally tax gains realised during the period you were their resident, and several look hard at sales timed suspiciously close to a move.
If you changed state during the tax year, or if you sold real property located outside Texas, the answer here is not your answer. Those situations turn on sourcing and part-year rules that this calculator does not model, and they are worth a conversation with a professional.
A worked Texas 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 $200,000 long-term gain on a $120,000 income
A single Texas resident earning $120,000 sells shares held several years for a $200,000 gain. The state bill is zero; everything below is federal.
- Taxable income after deduction
- $303,900
- Taxable gain
- $200,000
- Tax owed without the sale
- $17,570
- Tax the sale added
- $34,560
- of which net investment income tax
- $4,560
- Total federal tax
- $52,130
- Texas state tax
- $0
- Effective rate on the gain
- 17.28%
Texas takes nothing, but the federal bill is still substantial — the 15% long-term rate plus the 3.8% net investment income tax, which this income level crosses.
Caveats on this example (1)
- 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.
Show the working — 13 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$200,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $320,000 less $16,100.
- Taxable income$303,900
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%$11,770
$53,500 of taxable income between $50,400 and $103,900.
- Ordinary income stacked below the long-term gain$103,900
Long-term gain is taxed by reference to where it sits ON TOP of $103,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$30,000
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $320,000 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%$4,560
3.8% of $120,000, the lesser of net investment income ($200,000) and the amount by which modified AGI exceeds the threshold ($120,000). Here the binding figure is the excess of modified AGI over the threshold.
- Texas does not tax capital gains$0
Texas levies no individual income tax, so capital gains are not taxed at the state level.
- Total tax$52,130
$52,130 on $320,000 of total income, an effective rate of 16.29%.
What this calculator does not cover for Texas
Because Texas levies no individual income tax, there is no state calculation to get wrong — the figure is zero regardless of your income or the size of the gain. Everything below the state line is federal.
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
- FloridaNo individual income tax. Federal tax still applies in full.
- WashingtonNo income tax, but a 7% / 9.9% excise on long-term gains. Real estate exempt.
- CaliforniaTaxed as ordinary income, nine brackets, plus a 1% surcharge over $1m.
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.