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Author: gailkay One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: Is state tax saved on a long-term capital ga Date: 6/10/2001 3:48 PM
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Question: is there any state-related capital gains tax?

Depends on the state.

I ask because if I sell a stock with less than one year, I pay 28% ordinary income and 7% North Carolina state tax for a gross rate of 28+7=35%.

Actually it is a little less than that (if you itemize deductions on your federal return) because you get a deduction for the state tax you pay. 28+(7-(7*.28))=28+5.04=33.04%

Don't take this to the bank, cuz I'm in California, but it appears that NC doesn't have a separate CG rate. If you look at how the NC return calculates the tax, it takes the Federal Taxable Income makes some NC adjustments (not any for capital gain) and then applies a tax rate to the result.

If NC had a separate CG rate you would back out the cap gain, figure the tax on the non-CG income, apply the CG rate to the CG and add the two amounts together.

This is just off the top of my head. Well, I did a quick run at the NC Dept of Revenue website http://www.dor.state.nc.us/ - and didn't find anything specific on the topic.

Gail ~ the only thing worse than doing an out-of-state return is doing a multi-state part-year non-resident expat return - or my own tax return.
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