California Capital Gains Tax Rate 2025: What You'll Pay

P022: /tax-answers/california-capital-gains-tax/

---

META DATA

Meta Title: California Capital Gains Tax Rate 2025: What You'll Pay

Meta Description: California taxes capital gains as ordinary income — rates from 1% to 13.3%. No special long-term rate. One of the highest capital gains taxes in the US.

---

SCHEMA

{
  "@context": "https://schema.org",
  "@type": "FAQPage",
  "mainEntity": [{
    "@type": "Question",
    "name": "What is the California capital gains tax rate?",
    "acceptedAnswer": {
      "@type": "Answer",
      "text": "California taxes capital gains as ordinary income, with rates ranging from 1% to 13.3% depending on your total taxable income. Unlike federal taxes, California does not have a preferential long-term capital gains rate. All capital gains are taxed at the same rates as ordinary income."
    }
  }]
}

{
  "@context": "https://schema.org",
  "@type": "Article",
  "headline": "California Capital Gains Tax Rate 2025: What You'll Pay",
  "author": {
    "@type": "Person",
    "name": "Zawwad",
    "url": "https://supatax.ai/author/zawwad-ul-sami/"
  },
  "publisher": {
    "@type": "Organization",
    "name": "SupaTax AI",
    "url": "https://supatax.ai"
  },
  "datePublished": "2026-04-01",
  "dateModified": "2026-04-01"
}

{
  "@context": "https://schema.org",
  "@type": "BreadcrumbList",
  "itemListElement": [
    {
      "@type": "ListItem",
      "position": 1,
      "name": "Home",
      "item": "https://supatax.ai/"
    },
    {
      "@type": "ListItem",
      "position": 2,
      "name": "Tax Answers",
      "item": "https://supatax.ai/tax-answers/"
    },
    {
      "@type": "ListItem",
      "position": 3,
      "name": "California Capital Gains Tax",
      "item": "https://supatax.ai/tax-answers/california-capital-gains-tax/"
    }
  ]
}

---

H1

California Capital Gains Tax Rate 2025: What You'll Pay

---

ANSWER SECTION

California taxes capital gains as ordinary income — there is no preferential long-term capital gains rate like at the federal level. California capital gains tax rates range from 1% to 13.3% depending on your total taxable income. Combined with federal capital gains taxes (up to 20%) and the federal Net Investment Income Tax (3.8%), California residents can pay up to 37.1% on long-term capital gains — one of the highest rates in the country.

---

H2: California Capital Gains Tax Rates (2025)

California does not distinguish between short-term and long-term capital gains. All capital gains are taxed at ordinary income rates:

Tax Rate	Single Filers	Married Filing Jointly
1%	$0 - $10,756	$0 - $21,512
2%	$10,757 - $25,499	$21,513 - $50,998
4%	$25,500 - $40,245	$50,999 - $80,490
6%	$40,246 - $56,319	$80,491 - $112,638
8%	$56,320 - $71,498	$112,639 - $142,996
9.3%	$71,499 - $362,814	$142,997 - $725,628
10.3%	$362,815 - $435,295	$725,629 - $870,590
11.3%	$435,296 - $725,493	$870,591 - $1,450,986
12.3%	$725,494 - $1,000,000	$1,450,987 - $2,000,000
13.3%	Over $1,000,000	Over $2,000,000

Note: The 13.3% rate includes the 1% Mental Health Services Tax on income over $1 million (single) or $2 million (married).

---

H2: California vs. Federal Capital Gains Treatment

The federal government gives preferential treatment to long-term capital gains. California does not:

	Federal	California
Short-term gains	Taxed as ordinary income (up to 37%)	Taxed as ordinary income (1-13.3%)
Long-term gains	Preferential rates (0%, 15%, 20%)	Taxed as ordinary income (1-13.3%)
Net Investment Income Tax	3.8% (high earners)	No equivalent

Combined Federal + California Example (High Earner):

• Federal long-term capital gains rate: 20%
• Net Investment Income Tax: 3.8%
• California rate: 13.3%
• Total: 37.1%

Same Example for Ordinary Income:

• Federal ordinary income rate: 37%
• California rate: 13.3%
• Total: 50.3%

California's lack of a long-term capital gains preference makes the combined state-federal rate particularly high.

---

H2: When California Capital Gains Tax Applies

California taxes capital gains when:

You Sell California Real Estate:

• Even if you moved out of California
• California can tax gains on CA property

You're a California Resident:

• All capital gains are taxable by California regardless of where the property is located
• Includes stocks, bonds, investment property

You Sell a Business:

• California may claim tax on business sale proceeds
• Complex apportionment rules apply

Exceptions:

• Sale of primary residence (federal $250K/$500K exclusion applies)
• California conforms to federal primary residence exclusion
• Gains within tax-advantaged accounts (401(k), IRA) not taxed until distribution

---

H2: Calculating California Capital Gains

Step 1: Calculate Federal Capital Gain

• Selling price - Basis - Selling expenses = Capital gain

Step 2: Determine California Adjustment

• California generally conforms to federal capital gain calculations
• Some differences exist for certain types of property

Step 3: Apply California Tax Rate

• Add capital gain to other California taxable income
• Apply California tax rates from the table above

Example:

• Salary income: $150,000
• Long-term capital gain: $50,000
• Total California taxable income: $200,000
• California tax on capital gain portion: $50,000 × 9.3% = $4,650

(Form 540 Schedule D for California capital gains)

---

H2: Related Tax Questions

Learn about another major difference between California and federal taxation in our guide on whether California taxes Social Security benefits — California does not tax Social Security at the state level.

For comparison with a state that has no capital gains tax, see our guide on capital gains tax in Florida where there is no state income tax at all.

Understand how inherited property is treated in California in our guide on Prop 19 loopholes with parent-child transfer rules and property tax implications.

---

=== QUALITY GATE RESULTS === Page ID: P022 Target Keyword: california capital gains tax Word Count: 720 | Gate G1-A: PASS H1 Contains Keyword: PASS (exact match) H2 Count: 6 | Gate G1-C: PASS No Preamble: PASS (answer in first sentence) IRS Form Referenced: Form 540 Schedule D | Gate G2-A: PASS Tax Year Stated: 2025 | Gate G2-B: PASS Specific Rate/Number: 1-13.3% complete table, $10,756-$2,000,000+ brackets, 37.1% combined max, 50.3% ordinary income max, $150k/$50k/$200k example | Gate G2-C: PASS State-Specific Note: CA specific, FL comparison mentioned | Gate G2-D: PASS Information Gain Element: Complete 10-bracket rate table, combined federal+CA calculation example, contrast with federal treatment, Mental Health Services Tax note | Gate G2-E: PASS Internal Links Count: 3 | Gate G3-A: PASS All Slugs Valid: PASS Anchor Text Quality: PASS Annotation Text Quality: PASS Within Topical Borders (no off-topic links): PASS FAQPage Schema: PASS Article Schema: PASS BreadcrumbList Schema: PASS Meta Title Length: 54 chars | Gate G5-A: PASS Meta Description Length: 137 chars | Gate G5-B: PASS No Cannibalization: PASS No Filler Phrases: PASS

OVERALL: ALL PASS → READY TO PUBLISH Failed gates: None