Real estate excluded from capital gains

From the 2024 DOR Tax Exemption Study

82.87.050(2) - Interest held in a privately-held entity excluded from capital gains Description The capital gains tax does not apply to capital gains derived from the sale or exchange of an interest in a business (or other privately held entity), only to the extent that such capital gains resulted from the sale of real estate directly owned by the business. Purpose To avoid taxing the sale or exchange of real estate. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $12.200 $12.900 $13.300 $13.600 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.000 $12.600 $12.900 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect January 1, 2025, and impacts 12 months of collections in fiscal year 2026. - Growth rate mirrors the long-term capital gains growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - Approximately 50% of taxpayers with capital gains from the sale or exchange of interest in a privately held entity use the privatel