DC Real Estate Sale: Capital Gains Tax Explained

No discount for the gain — and DC's top rate runs well above its Maryland and Virginia neighbors.

DC Office of Tax and Revenue

Quick answer: up to 10.75% for 2026, since DC simply folds the gain into ordinary taxable income. See the full cost picture in the DC probate real estate sale calculator.

No preferential rate for long-term gains

Seven brackets, one schedule for everyone

DC's 2026 income tax runs seven progressive brackets ranging from 4% to 10.75%, with the top rate applying to income above $1,000,000 — DC doesn't use different brackets by filing status the way many states do.

Notably higher than its immediate neighbors

DC's 10.75% top rate is notably higher than Maryland's or Virginia's top state rates, making DC one of the higher-tax jurisdictions in the immediate region for anyone selling a house here.

A separate question from the DC estate tax

DC's own estate tax applies only above roughly $4.71 million (2025 threshold) — a distinct calculation from the income tax on the sale's gain, and one that affects far fewer estates.

Facing probate in the District of Columbia?

A local probate attorney can review your estate — many offer a free consultation.

Talk to a the District of Columbia attorney

The same bracket schedule applies to every sale that closes within the District, since there are no counties to vary by.

Capital gains tax on the sale — frequently asked questions

Does DC give long-term capital gains a discount?

No — DC taxes capital gains as ordinary income, with no separate, lower rate for long-term gains.

What are DC's 2026 income tax brackets?

Seven progressive brackets ranging from 4% to 10.75%, with the top rate applying to income above $1,000,000 — DC doesn't use different brackets by filing status.

How does DC's top rate compare to nearby Maryland and Virginia?

DC's 10.75% top rate is notably higher than Maryland's or Virginia's top state rates, making DC one of the higher-tax jurisdictions in the immediate region.

Does DC's estate tax apply on top of this income tax?

Only for larger estates — DC's own estate tax applies above roughly $4.71 million (2025 threshold), a distinct calculation from the income tax on the sale's gain.

This page provides general guidance only and is not legal, tax, or financial advice. Based on DC Office of Tax and Revenue guidance and federal Internal Revenue Code § 1014. Confirm current figures with the IRS, the DC Office of Tax and Revenue, a CPA, or a licensed DC attorney before acting.