How Much Is Capital Gains Tax in Utah: Rates and Home Sales

If you sell an appreciated asset while living in Utah, expect to pay the state’s flat 4.5% income tax on the gain plus a federal rate that depends on how long you held the asset and how much you earn. Long-term gains are taxed federally at 0%, 15%, or 20%; short-term gains are taxed at ordinary federal rates of 10% to 37%. A 3.8% surtax can apply to high earners. All together, the combined capital gains tax in Utah runs from as low as 4.5% to roughly 28.3%.

Utah’s Flat 4.5% Rate on Every Gain

Utah taxes all income at a single flat rate under Utah Code 59-10-104, and capital gains are no exception.¹ The rate is 4.5%, effective January 1, 2025, after the legislature reduced it from 4.55%.

There is no separate short-term or long-term treatment at the state level. A stock held for three months and a stock held for a decade are taxed the same by Utah. The state also starts its calculation from your federal adjusted gross income, so anything you legally exclude on your federal return, including the home sale exclusion, is automatically excluded from Utah taxable income too.²

Federal Long-Term Capital Gains Rates

Hold an asset more than one year before selling and the profit is a long-term capital gain, taxed at preferential federal rates of 0%, 15%, or 20%.³ The 2026 taxable-income thresholds are:⁴p>

0% rate: up to $49,450 single, $98,900 married filing jointly, $66,200 head of household.
15% rate: above the 0% cutoff up to $545,500 single, $613,700 joint, $579,600 head of household.
20% rate: any taxable income above the 15% ceiling.

Add Utah’s 4.5% and a gain taxed at the 15% federal rate carries a combined rate of 19.5%. At the top federal bracket the combined rate reaches 24.5% before any surtax.

Federal Short-Term Capital Gains Rates

Sell an asset you held for one year or less and the gain is short-term, taxed at ordinary federal rates. For 2026 those rates run from 10% to 37%:⁵

10%: up to $12,400 single or $24,800 joint.
12%: $12,401 to $50,400 single or $24,801 to $100,800 joint.
22%: $50,401 to $105,700 single or $100,801 to $211,400 joint.
24%: $105,701 to $201,775 single or $211,401 to $403,550 joint.
32%: $201,776 to $256,225 single or $403,551 to $512,450 joint.
35%: $256,226 to $640,600 single or $512,451 to $768,700 joint.
37%: above $640,600 single or $768,700 joint.

Utah’s 4.5% still stacks on top. Holding an investment for at least a year and a day before selling can move you from these ordinary rates down to the long-term schedule.

When Long-Term Gains Are Taxed Above 20%

Two categories of long-term gains do not get the standard 0/15/20% treatment:

Collectibles such as art, antiques, coins, stamps, and precious metals are taxed at a maximum federal rate of 28%.³
Unrecaptured Section 1250 gain, the portion of a real estate gain attributable to prior depreciation deductions, is taxed at a maximum federal rate of 25%.³

Utah’s 4.5% applies on top of these higher federal rates. Sell a rental property in which you previously claimed $50,000 of depreciation and that $50,000 slice can be taxed at up to 25% federally plus 4.5% in Utah, even if the rest of your gain falls into the 15% or 20% bracket.

The 3.8% Net Investment Income Tax

Higher-income taxpayers owe an extra 3.8% federal surtax on net investment income, capital gains included, once modified adjusted gross income crosses these thresholds, which have not been adjusted for inflation since 2013:⁶

Single or head of household: $200,000.
Married filing jointly: $250,000.
Married filing separately: $125,000.

The 3.8% applies to the smaller of your net investment income or the amount by which your modified AGI exceeds the threshold. A married couple with $300,000 of modified AGI and $80,000 of net investment income would owe the surtax on $50,000, adding $1,900 in tax. Stack the surtax on top of the 20% federal rate and Utah’s 4.5%, and the combined rate on that slice of gain reaches 28.3%.

Selling Your Home in Utah

If the asset you are selling is your primary residence, a large portion of the gain may not be taxed at all. A single homeowner can exclude up to $250,000 of gain and a married couple filing jointly can exclude up to $500,000.⁷ Because excluded gain never reaches your federal AGI, it is out of reach of Utah’s tax too.²

You have to meet two tests during the five-year period ending on the sale date:⁸

Ownership test: you owned the home for at least two years, which do not need to be consecutive.
Use test: you lived in it as your primary residence for at least two years.

For joint filers, only one spouse must satisfy the ownership test, but both must satisfy the use test. You generally cannot use the exclusion if you already excluded gain from another home sale in the prior two years. If you become unable to care for yourself and move into a licensed care facility, the use requirement drops to one year, provided the two-year ownership condition is still met during the five-year window.

Cutting the Gain Before Tax Applies

The number you owe tax on is not sale price minus purchase price. Many ownership costs raise your cost basis and reduce the taxable gain dollar for dollar.⁹ Common basis increases for real property include:

Purchase-related closing costs like title insurance, legal fees, recording fees, transfer taxes, and survey costs.
Capital improvements such as adding a room, replacing an entire roof, installing central air, paving a driveway, or rewiring.
Local improvement assessments for water connections, sidewalks, or road paving that add to the property’s value.

Routine repairs and maintenance, like patching drywall or fixing a faucet, do not count. The line is whether the work adds value or extends useful life (basis increase) or merely keeps the property in working order (no increase). Keep receipts; the burden of proof is yours if the IRS questions the number.

Capital losses also reduce what you owe. Losses offset gains dollar for dollar, and if losses exceed gains you can deduct up to $3,000 of the excess against ordinary income each year, or $1,500 if married filing separately.¹⁰ Anything left over carries forward indefinitely for individual taxpayers. Watch the wash sale rule: if you sell a security at a loss and buy a substantially identical one within 30 days before or after the sale, the loss is disallowed and instead added to the basis of the replacement.¹¹ Because Utah starts from federal AGI, these federal deductions cut your Utah tax as well. A $3,000 loss deduction saves an extra $135 in Utah tax on top of the federal savings.

The Utah Small Business Reinvestment Credit

Utah offers one narrow way to erase the state’s 4.5% on a capital gain. Under Utah Code 59-10-1022, if you reinvest gain proceeds into a qualifying Utah small business you can claim a nonrefundable credit equal to your gain multiplied by 4.5%.¹² All of the following must be true:

You spend 70% or more of the gross proceeds from the capital gain transaction to buy qualifying stock in a Utah small business corporation.
The stock purchase happens within 12 months after the capital gain transaction.
You did not hold an ownership interest in that Utah small business corporation before buying the qualifying stock.
The stock is common or preferred stock originally issued by the Utah small business corporation on or after January 1, 2008, in exchange for money or property, not for other stock or securities.

A “Utah small business corporation” for this credit is generally a corporation commercially domiciled in Utah that meets the federal definition under Internal Revenue Code Section 1244, with the asset cap adjusted to $2,500,000. Because it is nonrefundable, the credit can zero out your Utah liability but will not generate a refund, and the eligibility rules disqualify most Utah taxpayers with capital gains.

Paying Estimated Tax After a Large Gain

A big gain can leave you short at filing time and exposed to underpayment penalties. For 2026, you generally need to make federal estimated payments if you expect to owe at least $1,000 after withholding and refundable credits, and your withholding will cover less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax.¹³

If your 2025 adjusted gross income exceeded $150,000, or $75,000 if married filing separately, the prior-year safe harbor rises from 100% to 110%. Hitting either mark, 90% of the current year’s tax or the applicable prior-year percentage, keeps you out of penalty territory even if you write a check at filing time. Utah requires quarterly estimated state payments on a similar schedule when you expect to owe above a certain amount.

1
Utah Legislature. Utah Code 59-10-104 – Tax Basis — Tax Rate — Exemption
2
Utah State Tax Commission. Recent Info and Tax Law Changes
3
Internal Revenue Service. Topic No. 409, Capital Gains and Losses
4
Internal Revenue Service. Revenue Procedure 2025-32
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
6
Internal Revenue Service. Net Investment Income Tax
7
Internal Revenue Service. Topic No. 701, Sale of Your Home
8
Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain from Sale of Principal Residence
9
Internal Revenue Service. Publication 551, Basis of Assets
10
Office of the Law Revision Counsel. 26 USC 1211 – Limitation on Capital Losses
11
Office of the Law Revision Counsel. 26 USC 1091 – Loss from Wash Sales of Stock or Securities
12
Utah Legislature. Utah Code 59-10-1022 – Nonrefundable Tax Credit for Capital Gain Transactions
13
Internal Revenue Service. Form 1040-ES, Estimated Tax for Individuals