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 Virginia taxes a capital gain
Statutory authority: Va. Code 58.1-320 (retrieved 30 August 2026)
The clearest case of bracket creep on this site
Virginia has four brackets: 2% on the first $3,000 of taxable income, 3% to $5,000, 5% to $17,000, and 5.75% above that. The thresholds have not been changed since 1990.
Thirty-six years of inflation have done the rest. Seventeen thousand dollars was a meaningful income in 1990; today it is below a full-time minimum wage. The graduated schedule still exists in the statute, but for anyone with an ordinary job it is entirely theoretical — the first $17,000 of taxable income is charged at the lower rates and everything after it, which is to say almost all of it, is charged at 5.75%.
This is bracket creep by legislative inaction rather than by design. No Virginia legislature ever voted to make 5.75% the effective flat rate for working people. It happened because the thresholds were left alone while prices quadrupled, and it continues to happen a little more every year.
For a capital gain, Virginia is a flat 5.75% state
The effect on a gain is more complete than on a salary, because a gain stacks on top of ordinary income. Even a filer with a modest job has consumed all three lower brackets before the sale is counted, so the whole gain meets the top rate.
The arithmetic is worth stating precisely: the maximum benefit the lower brackets can ever confer is the difference between 5.75% and the lower rates applied across $17,000 of income, which comes to a few hundred dollars, once, and only if your total taxable income is under $17,000 to begin with. For everyone else the Virginia calculation is the gain multiplied by 5.75%.
That makes Virginia one of the most predictable states here. There is no threshold to plan around, no advantage to splitting a disposal, and no low-income year strategy at the state level unless the year is very low indeed.
Fixed thresholds mean this figure does not go stale
There is one genuine advantage to a frozen ladder, and it belongs to a calculator rather than a taxpayer. Because Virginia’s thresholds are set in statute and not indexed, they cannot fall out of date between publications.
Most states republish bracket figures each November or December, which means that for part of every year a calculator either uses last year’s numbers or refuses to answer. Virginia has no such problem: the 1990 figures are the 2026 figures, and a Virginia result here carries no stale-threshold warning because there is nothing that could have gone stale.
New Jersey is the only other state on this site in the same position. Everywhere else, a threshold is a moving target.
What thirty-six years of inaction is worth, in both directions
It is worth being even-handed about a frozen ladder, because the effect runs both ways depending on where you stand.
For a Virginia filer with an ordinary income, the freeze is a slow, invisible tax rise: brackets that were graduated in 1990 have flattened into a single effective rate, without any vote. For Virginia as a jurisdiction, the same freeze has kept the headline top rate at 5.75% for a generation, which is low by the standards of its neighbours — the District next door reaches 10.75%, and Delaware up the coast reaches 6.6% on a ladder that has itself been frozen since 2014.
So Virginia looks moderate on the rate and severe on the threshold, and which of those matters depends entirely on your income. Someone with a large gain pays 5.75% of it either way and should judge Virginia on that number alone. Someone with a small income and a small gain is paying close to the top rate on it too, which is the part a headline comparison of top rates never shows.
What Virginia does not change
Virginia gives capital gains no preferential rate and no general exclusion for long-held assets, so a gain is taxed exactly as a paycheque would be and the holding-period benefit is entirely federal.
Federally, nothing about Virginia matters. The holding-period ladder, the surtax on investment income above a threshold, and the reliefs on a home sale or a depreciated rental all run as they would in any state — and unlike the Virginia layer, several of those federal figures are re-indexed every year.
The state figure stacks your gain on federal ordinary taxable income. Virginia computes its own taxable income with its own standard deduction, personal exemptions and subtractions, none of which are modelled, so treat the number as close for a simple wage-and-sale year. Virginia does have narrow subtractions for certain long-term capital gains from qualified technology businesses, which are not modelled either.
A worked Virginia 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 $150,000 gain on an $80,000 salary
A single filer in Virginia earning $80,000 sells long-held shares for a $150,000 gain.
- Taxable income after deduction
- $213,900
- Taxable gain
- $150,000
- Tax owed without the sale
- $8,770
- Tax the sale added
- $23,640
- of which net investment income tax
- $1,140
- Total federal tax
- $32,410
- Virginia state tax
- $8,625
- Effective rate on the gain
- 15.76%
The effective state rate is exactly 5.75% — the top rate, applied to every dollar of the gain. Virginia’s graduated ladder had no effect on this result at all.
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.
- Virginia: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
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$150,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $230,000 less $16,100.
- Taxable income$213,900
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%$2,970
$13,500 of taxable income between $50,400 and $63,900.
- Ordinary income stacked below the long-term gain$63,900
Long-term gain is taxed by reference to where it sits ON TOP of $63,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$22,500
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $230,000 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%$1,140
3.8% of $30,000, the lesser of net investment income ($150,000) and the amount by which modified AGI exceeds the threshold ($30,000). Here the binding figure is the excess of modified AGI over the threshold.
- Virginia income tax on the gain$8,625
$150,000 stacked on $63,900 of other taxable income across a 4-bracket ladder topping out at 5.75%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$41,035
$41,035 on $230,000 of total income, an effective rate of 17.84%.
A small gain on a small income, still near the top rate
A single filer earning $30,000 sells for a $12,000 gain. This is roughly the smallest realistic case, and the lower brackets still barely register.
- Taxable income after deduction
- $25,900
- Taxable gain
- $12,000
- Tax owed without the sale
- $1,420
- Tax the sale added
- $0
- Total federal tax
- $1,420
- Virginia state tax
- $666.75
- Effective rate on the gain
- 0%
Even here the effective state rate is around 5.56%, within a fifth of a point of the top rate. The $17,000 threshold was crossed by salary alone, which is what makes Virginia’s graduation invisible in practice.
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.
- Virginia: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
Show the working — 12 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$12,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $42,000 less $16,100.
- Taxable income$25,900
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%$180
$1,500 of taxable income between $12,400 and $13,900.
- Ordinary income stacked below the long-term gain$13,900
Long-term gain is taxed by reference to where it sits ON TOP of $13,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 0%$0
Taxable income stays at or below the $49,450 maximum zero-rate amount.
- Net investment income tax threshold$200,000
Modified AGI of $42,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax does not apply$0
Modified AGI is $158,000 below the threshold.
- Virginia income tax on the gain$666.75
$12,000 stacked on $13,900 of other taxable income across a 4-bracket ladder topping out at 5.75%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$2,086.75
$2,086.75 on $42,000 of total income, an effective rate of 4.97%.
What this calculator does not cover for Virginia
The Virginia figure stacks your gain on your federal ordinary taxable income. Virginia 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
- District of ColumbiaSeven brackets to 10.75%, among the highest rates in the country.
- DelawareSix brackets to 6.6%, on thresholds frozen since 2014.
- KentuckyFlat 3.5% for 2026, down from 4% in 2025.
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.