Kentucky variant. This is a Kentucky-specific version of the Stock Sale Capital Gains Tax Estimator, using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Stock Sale Capital Gains Tax Estimator.
Most states tax capital gains as ordinary income. In Kentucky, that means a top rate of 4% on gains.
Capital gains tax in Kentucky
Federally, long-term gains are taxed at 0%, 15%, or 20% depending on income, plus a possible 3.8% net investment income tax. Kentucky then taxes the same gains as ordinary income at up to 4%.
Short-term gains (assets held under a year) are taxed as ordinary income at both levels - usually the most expensive outcome.
About taxes and housing in Kentucky
Kentucky applies a flat individual income tax that the state has been gradually lowering.
Kentucky has below-average property taxes and some of the more affordable home prices in the country.
Kentucky's economy features bourbon distilling, horse breeding, automotive manufacturing, and coal in its eastern regions.
Worked example: $50,000 long-term gain
A $50,000 long-term gain: federal 15% = $7,500, plus Kentucky state tax up to 4% = $2,000, for a combined bill near $9,500.
Quick reference
- State income tax: Flat 4.0% (decreasing toward 3.5%)
- State sales tax: 6% (plus 0.00% avg local)
- Median home value: $200,000
- Median household income: $60,183
- Effective property tax rate: 0.83%
- Avg auto insurance: $1,859/yr
Frequently Asked Questions
Does Kentucky tax capital gains?
Yes - Kentucky taxes capital gains as ordinary income at up to 4%.
What's the difference between short and long-term gains?
Assets held over a year get preferential long-term federal rates (0/15/20%); shorter holds are taxed as ordinary income.