Mile High Home Group – Welcome to Denver

Colorado follows federal capital gains tax rules with no separate state capital gains tax—instead, long-term gains (over one year) are taxed at federal rates of 0%, 15%, or 20% based on income, plus Colorado’s flat 4.4% income tax on taxable gains; primary homes exclude up to $250K single/$500K married if owned and used 2 of last 5 years, shielding most Denver sellers in the Colorado housing market.

Federal and State Tax Basics

After 15+ years in Denver real estate and thousands of transactions, I break down gains as sale price minus adjusted basis (original cost + improvements – depreciation) minus selling costs. Short-term gains (under one year) hit ordinary income rates up to 37% federal + 4.4% state. Long-term qualifies for preferential federal brackets; exclusions wipe out taxes for qualifying primaries. Investors recapture depreciation at 25%. Report via Form 1099-S; 1031 exchanges defer on rentals. Net investment income tax (3.8%) adds for high earners.

Document everything—receipts build basis.

Denver-Specific Tax Planning

Highlands Ranch real estate near Mountain Vista schools lets upsizing families max exclusions, HOA fees ($150-$400) as potential basis boosts via improvements. Littleton bungalows time sales post-sewer upgrades to inflate basis. Core Denver investors use exchanges for flips amid urban appreciation. Market cycles influence: spring peaks lock gains pre-reassessments hiking taxes; balanced winters spread via installments. Douglas County acreage qualifies exclusions if primary; compared to Littleton flexibility, Highlands Ranch villages aid family move-ups tax-free. High earners ($500K+ AGI) hit 23.8% effective tops.

CPAs refine per situation.

Practical Advice for Buyers and Sellers

Holding Period	Tax Rate	Exclusion Strategy
Primary 2+ Years	0% often	Meet 2/5 rule
Investment	15-20% + 4.4%	1031 deferral
Short-Term	Up to 41.4%	Avoid flips

Sellers, calculate basis early—add kitchen remodels, track commissions; time for exclusion if eligible.

Buyers, ask seller tax status—motivates concessions on taxable properties.

My hands-on, concierge-level service factors taxes into net proceeds block-by-block, weighs school/HOA fits through market cycles, builds pricing from local sales, and negotiates relentlessly post-tax clarity. Clients are long-term relationships and friends, not transactions—integrity, honesty, transparency, and relentless work ethic minimize liabilities.

If capital gains taxes affect your Denver real estate plans—Littleton, Highlands Ranch exclusions—reach out anytime. I’m here for a no-pressure conversation and honest guidance tailored to the Colorado housing market.