State Tax Layer Examples for CA, TX and FL: One Sale, Three Tax Bills

One sale, three states: the federal bill is $200,679 in each

Hypothetical: a couple filing jointly sells a rental for $1,575,000 and pays $75,000 of costs, so the amount realized is $1,500,000. Adjusted basis is $700,000 after $300,000 of depreciation, so the gain is $800,000. Their other taxable income is $250,000, they live in the state where the property sits, and for simplicity MAGI and state taxable income equal federal taxable income.

Under section 1(h) and the 2026 brackets in Rev. Proc. 2025-32, the $300,000 depreciation layer costs $73,464: part falls in the 24% bracket and the rest at the 25% cap. The remaining $500,000 is taxed $9,555 at 15% and $87,260 at 20%. Net investment income tax adds $30,400. Federal total: $200,679.

That number does not change by state. What changes is the state's own tax on the gain, what it withholds at closing, what it charges on the deed, and whether it keeps a claim on gain you defer. Run your own numbers with your CPA.

California adds $79,555 because it taxes the gain as ordinary income

California has no capital gains rate. Using the 2025 California tax rate schedules, the latest the Franchise Tax Board has published, joint taxable income rising from $250,000 to $1,050,000 adds $79,055, with the top slice taxed at 11.3%. The Behavioral Health Services Tax, the renamed 1% tax on taxable income over $1,000,000, adds $500. The California total is $280,234 federal and state combined, about 35% of the gain.

At closing, the Form 593 instructions require withholding of 3 1/3% of the sales price, here $52,448, unless an exemption applies or the seller elects the alternative calculation of 12.3% of estimated gain for individuals. Withholding is a prepayment credited on the return, not an extra tax.

The county documentary transfer tax under Revenue and Taxation Code section 11911 is $0.55 per $500, about $1,733 here, and some cities add their own; see California city transfer taxes.

Texas and Florida add no income tax, but Florida still taxes the deed

Article VIII, section 24-a of the Texas Constitution bars a tax on individuals' net incomes, section 24-b bars a tax on individuals' realized or unrealized capital gains, and section 29 bars a new transfer tax on conveyances of fee simple title. The Texas couple's bill is the $200,679 federal amount. Entities can still owe franchise tax; the Texas page covers it.

Article VII, section 5 of the Florida Constitution bars a state tax on the income of natural persons who are residents, so the Florida couple also owes only the federal $200,679 on the gain.

Florida's cost sits on the deed. Section 201.02 imposes 70 cents per $100 of consideration, about $11,025 on a $1,575,000 deed, and the Department of Revenue lists the exchange of property as consideration and makes all parties liable regardless of who agrees to pay. An exchange does not remove it; Florida doc stamps and the 1031 has the detail.

• California: $200,679 federal plus $79,555 state = $280,234, with $52,448 withheld at closing on a taxable sale.
• Texas: $200,679 federal, no state income tax, no state withholding, no transfer tax.
• Florida: $200,679 federal, no state income tax, about $11,025 of documentary stamp tax on the deed.

An exchange defers California's layer too, but California keeps a claim on it

California follows section 1031 for real property, so the California couple who exchanges defers both the $200,679 federal and $79,555 state layers. Form 593 treats a deferred exchange as exempt at the initial transfer, but the intermediary must withhold if the seller receives more than $1,500 of money or other property, and must withhold 3 1/3% of the sales price if the exchange fails.

If the replacement is outside California, the FTB 3840 instructions require a filing for the year of the exchange and every year after until the California-source deferred gain is recognized. They apply regardless of residence, so a seller who exchanges into Texas property and then moves to Florida still owes California when that gain is finally recognized. The FTB's like-kind exchange page shows that the obligation continues through later exchanges.

For Texas and Florida sellers, the exchange defers only federal tax. Their state question appears later: rents and gain from out-of-state replacement property, including DST property, are usually taxed where the property sits, which DST multi-state tax issues covers.

What to do with these numbers before you list

Price the state layer for the state where the property is and the state where you live; when they differ, both may claim part of the gain, and whether a 1031 defers state capital gains tax explains conformity. In California, budget for withholding on any boot and decide early whether the replacement will be in-state.

In Texas and Florida, the exchange decision is purely federal, which makes the math simpler: compare the $200,679 with what you would keep invested. A Florida seller should still ask who pays the documentary stamp tax under the contract. For withholding rules in other states, see state withholding at closing.