topic I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%? in Investors & landlords

I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%?

jimnsandyleek — Fri, 25 Sep 2020 19:41:35 GMT

Re: I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%?

Critter-3 — Fri, 25 Sep 2020 20:10:29 GMT

Just like any other income it is taxed by both the state & the feds at the tax rates they determine ... so yes, you could be paying 15% to both taxing authorities.

Hawaii Capital Gains Tax

You will pay either 0%, 15% or 20% in tax on long-term capital gains (which are gains that are realized from the sale of investment you held for at least one year). Short-term capital gains are taxed at the full income tax rates listed above.

Re: I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%?

Opus 17 — Fri, 25 Sep 2020 22:34:07 GMT

@Critter-3 wrote:

Just like any other income it is taxed by both the state & the feds at the tax rates they determine ... so yes, you could be paying 15% to both taxing authorities.

Hawaii Capital Gains Tax

You will pay either 0%, 15% or 20% in tax on long-term capital gains (which are gains that are realized from the sale of investment you held for at least one year). Short-term capital gains are taxed at the full income tax rates listed above.

Where do you get 15% and 20% for Hawaii capital gains tax? Did you copy the BS from smartasset.com's fake calculator?

If you work through the instructions to form N-11, it appears that capital gains are taxed at Hawaii's ordinary income tax rate (5-11% depending on your income). There is an alternative capital gains tax calculation that may cap long term capital gains at 7.25%, although the calculation method is obscure and I haven't worked through it. (Perhaps not coincidentally, that is the mandatory withholding rate that must be collected from non-residents who sell property in Hawaii.)

See more at https://files.hawaii.gov/tax/legal/taxfacts/tf2010-1.pdf

https://choicehi.com/hawaii-capital-gains-tax/

Re: I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%?

jimnsandyleek — Tue, 29 Sep 2020 21:24:06 GMT

So that means Hawaii taxes long term capital gains higher than ordinary income??

Re: I live in Hawaii and am selling a house that has been rented the past 5 years. For Cap Gains tax, do i have to pay 15% to both the fed and the state - combined 30%?

AmeliesUncle — Tue, 29 Sep 2020 22:19:58 GMT

I also want to point out that on the Federal return, the gain due to the depreciation is taxed at your regular tax rate, up to 25%. I am unsure how Hawaii taxes it.

If you want a fairly accurate estimate, use the CD/downloaded version of TurboTax (or create a 'mock' account in the online version) to create a 'mock' return with all of the estimated information. Or go to a tax professional.