Capital Gains Tax for Colorado (2026)
Colorado (CO) Key Facts
State Capital Gains Rate
4.4%
Taxed As
Ordinary income
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
Both taxed at state level
How This Calculator Works in Colorado
This calculator estimates your combined federal and Colorado capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
Colorado Overview
Colorado taxes capital gains as ordinary income at a flat 4.4%. Federal capital gains taxes also apply, with long-term rates of 0%, 15%, or 20% depending on income. The combined state and federal burden should be considered when planning asset sales or investment strategies.
How Colorado Compares
Colorado's capital gains rate of 4.4% compares to Utah at 4.65% and New Mexico at 5.9%. State capital gains taxes significantly impact net investment returns.
| State | Top Rate | Notes |
|---|---|---|
| Utah | 4.65% | Utah has a capital gains rate of 4.65%. |
| New Mexico | 5.9% | New Mexico has a capital gains rate of 5.9%. |
| Kansas | 5.7% | Kansas has a capital gains rate of 5.7%. |
Colorado's capital gains rate of 4.4% compares to a national average of approximately 5.04%. This is below the national average.
Tips for Colorado Residents
- 1Colorado taxes capital gains as ordinary income at a flat 4.4%.
- 2Federal long-term gains (held 1+ year) are taxed at 0%, 15%, or 20%. Colorado's state tax applies on top of the federal rate.
- 3Hold investments over one year to qualify for lower federal long-term rates rather than ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—reduces both federal and Colorado state capital gains tax.
- 5Consider the combined federal + state rate when planning large asset sales. The total can exceed 28.2% for high earners.