Michigan Capital Gains Tax Calculator
Calculate your 2026 capital gains tax in Michigan. Michigan taxes capital gains at rates up to 4.25%, plus federal taxes.
Original purchase price
Renovations, additions — added to your basis
Agent commissions, closing costs, title & transfer fees
Total Tax
$42,300
21.1% 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
MI State
$8,500
Effective Rate
21.1%
Michigan Capital Gains Tax
Michigan taxes capital gains at its flat 4.25% income tax rate. The rate stays at 4.25% for 2026 because the revenue trigger for a temporary cut was not met. Detroit and 23 other Michigan cities levy their own income tax on top, which this calculator leaves out.
Long-term: 4.25% flat rate (plus city income tax in some cities)
Short-term: 4.25% flat rate (plus city income tax in some cities)
NIIT Applied
The 3.8% Net Investment Income Tax applies because your income exceeds $200,000.
Michigan Capital Gains Tax Details
Tax Treatment
Tax Type
Flat tax rate
Maximum Rate
4.25%
Available Exemptions
- Federal home-sale exclusion ($250K single / $500K married filing jointly) flows through to the Michigan return
- Gain on assets bought before October 1, 1967 is taxed only on the part that built up after that date (Form MI-1040D)
- Gains on U.S. government obligations are not taxed
- Selling costs and capital improvements reduce the taxable gain
Michigan 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
- Michigan Treasury — Individual Income Tax Rate for 2026
Michigan state capital gains rules
This calculator provides estimates. Consult a tax professional for advice specific to your situation in Michigan.
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