What you should know about Washington's new capital gains tax
Gov. Jay Inslee signed the state's first capital gains tax into law on Tuesday. Although the tax is already facing a legal challenge, it is scheduled to go into effect at the start of next year.
Under the legislation, Washington residents must pay a 7% tax on the sale of stocks, bonds and other capital assets of over $250,000. Real estate, assets in a retirement account, timber and certain other assets are exempt.
The Business Journal spoke with Seattle-area accounting experts who explained what residents should know about the new tax.
Individuals and married couples face the same capital gains threshold.
Married couples don't get double the capital gains limit, said Andy Colson, tax partner at RSM US. A married couple selling stock, for example, would pay the 7% tax on sales of more than $250,000, not $500,000.
Get ready to grapple with terminology.
The capital gains tax will force state officials, businesses and individuals to clearly define terms like "residence" and "domicile," said Lance Lamprecht and Michael Mashni of Andersen, an accounting and financial consulting firm. Residents with homes out of state must figure out when the tax applies to them, while businesses must figure out how many of their employees are affected. Working through the confusion will be key.
https://www.bizjournals.com/seattle/news/2021/05/04/experts-capital-gains-tax-washington.html
