secure moneyMATH

Montana Capital Gains Tax

Montana offers a preferential rate on long-term capital gains, lower than ordinary income rates.

Why It Matters

Understanding how Montana taxes capital gains helps you estimate the true cost of selling investments, plan asset sales, and compare after-tax returns across states.

Try the calculator

Open Montana Capital Gains Tax Calculator →

How It Works

The calculator computes both your federal capital gains tax and Montana state tax to show your combined burden. Enter your gain amount, other income, and filing status.

Example

Single filer • $10,000 long-term gain • $100,000 other income • 2025

Federal

$1,500

15.00% rate

Montana

$410

4.10% rate

Total

$1,910

19.10%

Resources

Montana Capital Gains Tax Information

Official Montana tax information relevant to capital gains, including rates, forms, and filing resources.

Source: Montana Tax Authority

Frequently Asked Questions

Does Montana's preferential rate apply to all capital gains?

The preferential rate applies to net long-term capital gains (assets held more than 1 year). Short-term gains are taxed at ordinary income rates up to 4.1%.

How does Montana tax capital gains differently?

Unlike most states that tax gains as ordinary income, Montana applies a preferential rate to long-term capital gains, resulting in a lower combined rate of 27.9%.

What is Montana's capital gains tax rate?

Montana offers a preferential rate of 4.1% on long-term capital gains, lower than the top ordinary income rate of 4.1%. Short-term gains are taxed as ordinary income.

Key Terms

1031 Exchange
A tax-deferred swap of one investment property for another, allowing you to postpone paying capital gains tax.
Capital Asset
Property you own for investment or personal use that can generate a capital gain or loss when sold.
Capital Gain
The profit from selling a capital asset for more than you paid for it.
Capital Loss
The loss from selling a capital asset for less than your cost basis.
Cost Basis
The original value of an asset for tax purposes, usually the purchase price plus certain adjustments.
Filing Status
A category that determines your tax bracket thresholds, standard deduction, and eligibility for certain credits.
Holding Period
How long you owned an asset before selling it, which determines whether gains are taxed at short-term or long-term rates.
Long-Term Capital Gains
Profits from selling assets held for more than one year, taxed at preferential federal rates of 0%, 15%, or 20%.
Marginal Tax Rate
The tax rate applied to your next dollar of income — the highest bracket you've reached.
Modified Adjusted Gross Income
Your adjusted gross income (AGI) with certain deductions added back, used to determine eligibility for tax benefits and surtaxes like the NIIT.
Net Investment Income Tax
A 3.8% federal surtax on investment income for individuals with MAGI above $200,000 (single) or $250,000 (married filing jointly).
Short-Term Capital Gains
Profits from selling assets held for one year or less, taxed as ordinary income at rates up to 37%.
Step-Up in Basis
When an inherited asset's cost basis is reset to its fair market value at the date of the owner's death, eliminating all unrealized capital gains.
Taxable Income
Your gross income minus deductions — the amount used to determine which tax bracket you fall into.
Wash Sale Rule
An IRS rule that disallows a capital loss deduction if you buy a substantially identical security within 30 days before or after the sale.

Next review: 2027-01-15 • Applies to tax year: 2025