Long-term top effective
4.4%
Low-to-high rank #25
2026Rank #25Colorado Capital Gains Tax
4.4% long-term · 4.4% short-term · Taxed as ordinary income.
By Sammy S. · Founder · AuthorUpdated for 2026
Colorado capital gains tax snapshot
Flat 4.4% income tax on capital gains. No long-term exclusion. Rate may adjust if TABOR refund triggers apply.
Short-term top effective
4.4%
State treatment applies
Ordinary top rate
4.4%
Statutory baseline
State treatment
Taxed as ordinary income
See rules below
Compare Colorado with another state
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Long- and short-term rates, tax treatment, and scenario estimates.
Short-term vs long-term gains in Colorado
Short-term gains
4.4%
Assets generally held one year or less are modeled under the state's applicable short-term or ordinary-income rules.
Long-term gains
4.4%
Taxed as ordinary income. The rate reflects modeled exclusions, preferential caps, excise treatment, and listed surcharges.
Colorado capital gains tax examples
Single-filer examples show incremental state tax, federal tax, NIIT, and total modeled tax. They are estimates, not tax-return calculations.
| Scenario | State | Federal | NIIT | Total | Effective state |
|---|---|---|---|---|---|
| $50k long-term gain · $80k other taxable income | $2,200 | $7,500 | $0 | $9,700 | 4.4% |
| $250k long-term gain · $100k other taxable income | $11,000 | $37,500 | $5,700 | $54,200 | 4.4% |
| $50k short-term gain · $80k other taxable income | $2,200 | $11,486 | $0 | $13,686 | 4.4% |
| $1.5M long-term gain · $150k other taxable income | $66,000 | $280,225 | $55,100 | $401,325 | 4.4% |
$50k long-term gain · $80k other taxable income
- State tax
- $2,200
- Federal + NIIT
- $7,500
- Total tax
- $9,700
- Effective state
- 4.4%
$250k long-term gain · $100k other taxable income
- State tax
- $11,000
- Federal + NIIT
- $43,200
- Total tax
- $54,200
- Effective state
- 4.4%
$50k short-term gain · $80k other taxable income
- State tax
- $2,200
- Federal + NIIT
- $11,486
- Total tax
- $13,686
- Effective state
- 4.4%
$1.5M long-term gain · $150k other taxable income
- State tax
- $66,000
- Federal + NIIT
- $335,325
- Total tax
- $401,325
- Effective state
- 4.4%
Personal estimate
What changes your Colorado capital gains tax bill?
Colorado generally includes capital gains in ordinary taxable income. The incremental bill depends on the brackets already occupied by other income.
Adjusted cost basis
A higher documented basis produces a smaller taxable gain. Include eligible purchase costs, reinvested distributions, improvements, and prior adjustments.
Holding period
Federal treatment changes after one year. Colorado's state treatment is shown separately for short- and long-term gains above.
Other taxable income
Other income determines federal bracket stacking and where the gain enters Colorado's ordinary brackets. It can also trigger NIIT.
Capital losses
Current-year and carried-forward capital losses can offset gains under federal rules. State conformity and the treatment of state-only adjustments should be checked.
Asset and transaction type
Home sales, rental property, collectibles, qualified small-business stock, installment sales, and business assets can follow special rules.
Residency and sourcing
A Colorado resident may be taxed differently from a nonresident with Colorado-source gain. Domicile, sale date, asset location, and business activity can control.
Worked Colorado capital gains example
This example follows a single filer with a $250,000 long-term gain and $100,000 of other taxable income. It shows why the state headline rate and the final effective rate are not always the same.
Calculation flow
- 1.Taxable gain: $250,000 after the example's assumed basis and loss adjustments.
- 2.Income stacking: the gain sits above $100,000 of other taxable income for federal and progressive state calculations.
- 3.Colorado treatment: Flat 4.4% income tax on capital gains.
- 4.NIIT test: modeled MAGI exceeds the $200,000 single-filer threshold, so part of the gain is exposed to 3.8% NIIT.
Modeled result
- State tax
- $11,000
- Federal capital gains tax
- $37,500
- Federal NIIT
- $5,700
- Combined modeled tax
- $54,200
This is an educational comparison, not a return calculation. Filing status, deductions, local taxes, asset exceptions, and MAGI adjustments can change the result.
How different assets are treated in Colorado
The table rates describe general capital gains. Before applying them, determine whether the transaction has a federal exclusion, recapture component, or a Colorado-specific exemption.
Stocks, funds, and crypto
Colorado's general taxed as ordinary income applies after basis, holding period, and qualifying state adjustments are determined.
Primary residence
Federal law may exclude up to $250,000 of gain for eligible single filers or $500,000 for many joint filers who satisfy ownership and use tests. Confirm whether the state follows the federal exclusion.
Rental and business property
Depreciation recapture may be taxed as ordinary income or at special federal rates before the remaining gain receives capital treatment. A business sale may allocate price across several asset classes.
Before reporting a gain in Colorado
Reconcile the tax lots
Match sale proceeds to the shares or units sold. FIFO defaults can produce a different gain than specific identification.
Gather basis evidence
Save confirmations, transfer statements, reinvestment records, improvement invoices, and inheritance or gift basis documents.
Check estimated-tax deadlines
A large gain may create a quarterly federal and state payment even when wage withholding normally covers your return.
Review residency evidence
If you moved into or out of Colorado, document domicile, dates, asset location, and allocation. A move after the sale generally cannot change the completed transaction's sourcing.
Separate federal and state adjustments
Colorado may begin with federal income but apply its own additions, subtractions, exclusions, credits, or loss carryforwards.
Use the official return instructions
Confirm the current Colorado forms and instructions before filing, especially when the gain involves real estate, a business, nonresident sourcing, or a special exclusion.
How to read the Colorado figures
Top rate
A high-income comparison benchmark; progressive brackets may produce a lower effective rate.
Taxable gain
Sale proceeds minus adjusted basis, selling costs, exclusions, and eligible loss offsets.
Other income
Federal and progressive state brackets stack gains on top of other taxable income.
Not modeled
Every local tax, residency allocation, credit, loss carryforward, and asset-specific exception.
State rule: No long-term exclusion. Rate may adjust if TABOR refund triggers apply.
Colorado capital gains tax FAQs
Flat 4.4% income tax on capital gains. No long-term exclusion. Rate may adjust if TABOR refund triggers apply.
The modeled top long-term effective state rate is 4.4% (rank #25, where #1 is lowest).
Colorado taxes capital gains as ordinary income with no long-term rate preference.
In the single-filer model with $80,000 of other taxable income, estimated state tax is about $2,200 (4.4% of the gain).
About $11,000 of state tax in the modeled single-filer scenario with $100,000 of other taxable income.
About $2,200 of state tax in the modeled single-filer scenario with $80,000 of other taxable income.
Federal long-term and short-term brackets are the same nationwide. State of residence does not change IRS capital gains rates, though it changes your combined federal + state bill.
NIIT is federal. High-MAGI investors may owe 3.8% regardless of state. Some states (for example Minnesota) also have their own investment-income surcharges.
Colorado Department of Revenue — Individual income tax: https://tax.colorado.gov/individual-income-tax
Yes. Use the pair picker on this page or open a head-to-head comparison for rates, treatments, and scenario dollar differences.
Capital gains treatment is one factor. Also compare wage income tax, property tax, sales tax, housing costs, and employment opportunities.
Taxable gain equals amount realized minus adjusted basis, after exclusions and loss offsets. Unused capital losses may carry forward under federal rules.
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