Quick answer: Arkansas excludes 50% of net long-term capital gains, bringing the effective maximum state rate on a qualifying long-term gain to roughly 1.95%. See the full cost picture in the Arkansas probate real estate sale calculator.
Half the gain, simply excluded
Inherited property almost always qualifies
Federal law treats inherited property as long-term regardless of how briefly the estate actually holds it before selling, and Arkansas follows that same characterization for its 50% exclusion — so a probate sale, even one that closes quickly, typically still qualifies for the discount.
Roughly 1.95% effective, not the full top rate
With the 50% exclusion applied before Arkansas's 3.9% top bracket for 2026, the effective maximum rate on a qualifying long-term gain works out to about 1.95% — roughly half of what the same dollar amount of ordinary income would face.
A rare, extreme carve-out for very large gains
Gains above $10 million in a single tax year are exempt entirely, not just at the 50% rate — a threshold that goes well beyond what an ordinary inherited-house sale would ever reach, but a genuinely distinctive feature of Arkansas's tax code.
A local probate attorney can review your estate — many offer a free consultation.
The 50% exclusion and the 3.9% top rate apply identically whether the sale closes in Pulaski County, Benton County, or any other Arkansas county.