Alabama Capital Gains Tax Calculator
Calculate your 2026 capital gains tax in Alabama. Alabama taxes capital gains at rates up to 5%, plus federal taxes.
Original purchase price
Renovations, additions — added to your basis
Agent commissions, closing costs, title & transfer fees
Total Tax
$43,800
21.9% effective rate
Capital Gain
$200,000
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Tax Breakdown
Sale price minus selling costs and all taxes (before any mortgage payoff).
Federal
$33,800
AL State
$10,000
Effective Rate
21.9%
Alabama Capital Gains Tax
Alabama taxes capital gains as ordinary income at 2%, 4% and 5%. The 5% rate starts at $3,000 of taxable income ($6,000 married filing jointly), so nearly every gain is taxed at 5%. This calculator applies the 5% top rate to the whole gain and leaves out Alabama's deduction for federal income tax paid, so it overstates the tax for most filers.
Long-term: Taxed as ordinary income (up to 5%)
Short-term: Taxed as ordinary income (up to 5%)
NIIT Applied
The 3.8% Net Investment Income Tax applies because your income exceeds $200,000.
Alabama Capital Gains Tax Details
Tax Treatment
Tax Type
Taxed as ordinary income
Maximum Rate
5%
Available Exemptions
- Federal home-sale exclusion ($250K single / $500K married filing jointly) flows through to the Alabama return
- Federal income tax paid is deductible on the Alabama return (not applied here)
- Selling costs and capital improvements reduce the taxable gain
Alabama Capital Gains Tax FAQ
Official References
- IRS Topic 409: Capital Gains and Losses
Federal capital gains tax guidance
- IRS Publication 523: Selling Your Home
$250K / $500K home-sale exclusion, basis adjustments, and selling expenses
- Alabama DOR — Individual Income Tax Rate
Alabama state capital gains rules
This calculator provides estimates. Consult a tax professional for advice specific to your situation in Alabama.
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