Alaska has no state income tax, meaning you pay $0 in state capital gains tax. You still owe federal capital gains tax.
AK State Rate
0%
No state income tax
Federal Rate
15%
Most common long-term bracket
Combined Effective
18.8%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Alaska is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in Alaska don't qualify for the exclusion. You'll owe 0% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Alaska, homes sold in January sell for 11% more than those sold in August (-7%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in Alaska and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
Alaska0%You | 0% | $0 | No state income tax |
| 7% | $10,500 | 7% on gains > $250K (since 2022) |
Alaska is one of nine states with no state income tax, which means you pay $0 in state capital gains tax when selling your home. This zero-tax advantage has made Alaska attractive for real estate investors, though the state's unique geography and climate create their own considerations for property values.
While you avoid state taxes entirely, federal capital gains obligations still apply. Most sellers owe 15% federal capital gains tax on their taxable gain, plus potentially the 3.8% Net Investment Income Tax (NIIT) if their income exceeds $200K (single) or $250K (married). The federal $250K/$500K primary residence exclusion remains your most powerful tool for reducing your tax bill.
Alaska's Permanent Fund Dividend (PFD) does not affect your capital gains tax calculation, but it does contribute to your total income, which could push you into a higher federal bracket or trigger the NIIT. Sellers should factor their PFD into their tax planning for the year of sale.
For military families stationed in Alaska, the IRS offers special rules that can extend the 2-of-5-year residency requirement, potentially preserving your exclusion eligibility even if you were deployed. Alaska's large military population makes this an important consideration for many home sellers in the Anchorage and Fairbanks areas.
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