Tennessee variant. This is a Tennessee-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 Tennessee, that means a top rate of 0% on gains - except there is no state income tax, so realized gains face only federal tax.
Capital gains tax in Tennessee
Federally, long-term gains are taxed at 0%, 15%, or 20% depending on income, plus a possible 3.8% net investment income tax. Tennessee adds no state tax on those gains.
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 Tennessee
Tennessee levies no state income tax on wages, having fully repealed its tax on interest and dividend income in 2021.
Tennessee's effective property tax rate is relatively low near 0.67%, with median home values around $320,000.
Tennessee's economy includes music and tourism in Nashville and Memphis, automotive manufacturing, and healthcare.
Worked example: $50,000 long-term gain
A $50,000 long-term gain in Tennessee owes only federal tax (e.g., $7,500 at the 15% bracket) - Tennessee adds $0.
Quick reference
- State income tax: No state income tax (eliminated Hall tax in 2021)
- State sales tax: 7% (plus 2.55% avg local)
- Median home value: $320,000
- Median household income: $67,631
- Effective property tax rate: 0.67%
- Avg auto insurance: $1,373/yr
Frequently Asked Questions
Does Tennessee tax capital gains?
Tennessee has no state income tax, so realized gains face only federal tax.
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.