Long-term top effective
1.5%
Low-to-high rank #10
2026Rank #10North Dakota Capital Gains Tax
1.5% long-term · 2.5% short-term · Preferential long-term treatment.
By Sammy S. · Founder · AuthorUpdated for 2026
North Dakota capital gains tax snapshot
40% exclusion for net long-term capital gains. Remaining gain is taxed under North Dakota brackets (top 2.5%).
Short-term top effective
2.5%
State treatment applies
Ordinary top rate
2.5%
Statutory baseline
State treatment
Preferential long-term treatment
See rules below
Compare North Dakota with another state
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Long- and short-term rates, tax treatment, and scenario estimates.
Short-term vs long-term gains in North Dakota
Short-term gains
2.5%
Assets generally held one year or less are modeled under the state's applicable short-term or ordinary-income rules.
Long-term gains
1.5%
Preferential long-term treatment. The rate reflects modeled exclusions, preferential caps, excise treatment, and listed surcharges.
North Dakota 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 | $585 | $7,500 | $0 | $8,085 | 1.17% |
| $250k long-term gain · $100k other taxable income | $2,925 | $37,500 | $5,700 | $46,125 | 1.17% |
| $50k short-term gain · $80k other taxable income | $975 | $11,486 | $0 | $12,461 | 1.95% |
| $1.5M long-term gain · $150k other taxable income | $21,898.16 | $280,225 | $55,100 | $357,223.16 | 1.46% |
$50k long-term gain · $80k other taxable income
- State tax
- $585
- Federal + NIIT
- $7,500
- Total tax
- $8,085
- Effective state
- 1.17%
$250k long-term gain · $100k other taxable income
- State tax
- $2,925
- Federal + NIIT
- $43,200
- Total tax
- $46,125
- Effective state
- 1.17%
$50k short-term gain · $80k other taxable income
- State tax
- $975
- Federal + NIIT
- $11,486
- Total tax
- $12,461
- Effective state
- 1.95%
$1.5M long-term gain · $150k other taxable income
- State tax
- $21,898.16
- Federal + NIIT
- $335,325
- Total tax
- $357,223.16
- Effective state
- 1.46%
Personal estimate
What changes your North Dakota capital gains tax bill?
North Dakota gives qualifying long-term gains preferential treatment. Short-term gains generally do not receive the same exclusion or lower schedule.
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. North Dakota's long-term preference may add another reason to verify acquisition and sale dates.
Other taxable income
Other income determines federal bracket stacking. 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 North Dakota resident may be taxed differently from a nonresident with North Dakota-source gain. Domicile, sale date, asset location, and business activity can control.
Worked North Dakota 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.North Dakota treatment: 40% exclusion for net long-term 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
- $2,925
- Federal capital gains tax
- $37,500
- Federal NIIT
- $5,700
- Combined modeled tax
- $46,125
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 North Dakota
The table rates describe general capital gains. Before applying them, determine whether the transaction has a federal exclusion, recapture component, or a North Dakota-specific exemption.
Stocks, funds, and crypto
North Dakota's general preferential long-term treatment 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 North Dakota
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 North Dakota, 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
North Dakota may begin with federal income but apply its own additions, subtractions, exclusions, credits, or loss carryforwards.
Use the official return instructions
Confirm the current North Dakota forms and instructions before filing, especially when the gain involves real estate, a business, nonresident sourcing, or a special exclusion.
How to read the North Dakota 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: Remaining gain is taxed under North Dakota brackets (top 2.5%).
North Dakota capital gains tax FAQs
40% exclusion for net long-term capital gains. Remaining gain is taxed under North Dakota brackets (top 2.5%).
The modeled top long-term effective state rate is 1.5% (rank #10, where #1 is lowest).
Yes — preferential long-term treatment. Short-term top effective rate is 2.5%.
In the single-filer model with $80,000 of other taxable income, estimated state tax is about $585 (1.17% of the gain).
About $2,925 of state tax in the modeled single-filer scenario with $100,000 of other taxable income.
About $975 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.
North Dakota Office of State Tax Commissioner — Individual income tax: https://www.nd.gov/tax/individual/
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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