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Virginia Capital Gains Tax

Virginia taxes capital gains as ordinary income using its progressive brackets.

Why It Matters

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

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Open Virginia Capital Gains Tax Calculator →

How It Works

The calculator computes both your federal capital gains tax and Virginia 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

Virginia

$575

5.75% rate

Total

$2,075

20.75%

Resources

Virginia Capital Gains Tax Information

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

Source: Virginia Tax Authority

Frequently Asked Questions

Does Virginia distinguish between short-term and long-term gains?

No. At the state level, Virginia taxes both short-term and long-term capital gains as ordinary income. The federal preferential rates (0%/15%/20%) still apply to long-term gains for the federal portion.

How does Virginia tax capital gains?

Virginia taxes capital gains as ordinary income using progressive brackets. The top marginal rate is 5.8%, but your effective rate depends on your total taxable income.

What is the combined capital gains tax rate in Virginia?

The maximum combined rate is 29.6% (federal 20% + NIIT 3.8% + state 5.8%). Most filers pay less because of progressive brackets and the federal 0%/15% rates.

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