Federal Capital Gains Rates for Florida Residents

Since Florida doesn’t add anything on top, your total capital gains tax is the federal tax and nothing else. For 2024, the federal rates on long-term capital gains (assets held more than one year) are:

• 0% for single filers with taxable income up to $47,025 ($94,050 joint)
• 15% for income between $47,026 and $518,900 ($583,750 joint)
• 20% for income above $518,900 ($583,750 joint)

Add the 3.8% net investment income tax if your MAGI exceeds $200,000 (single) or $250,000 (joint), and the maximum federal rate on long-term gains is 23.8%. That’s your ceiling. No state layer, no city layer, nothing else.

Short-term gains (assets held one year or less) are taxed as ordinary income at federal rates up to 37%, plus the 3.8% NIIT. Still no state tax on top.

What New Arrivals Save

The savings depend on where you came from. Here’s what a $1 million long-term capital gain looks like for a high-income filer:

• Miami resident: $238,000 total tax (23.8% federal)
• Former New Yorker (NYC): would have paid $385,760 (23.8% + 10.9% + 3.876%). Savings: $147,760
• Former Californian (LA): would have paid $371,000 (23.8% + 13.3%). Savings: $133,000

Those are annual numbers for people who regularly realize gains. A hedge fund manager, tech executive with vesting RSUs, or active real estate investor saving $130,000-$150,000 per year on state taxes will accumulate $1.3-$1.5 million in savings over a decade. The numbers are hard to argue with.

Maintaining Your Florida Domicile

Living in Miami doesn’t automatically protect you from your former state’s tax authority. Both New York and California actively audit high-income individuals who recently relocated, and their burden of proof requirements are different from what you might expect.

To maintain bulletproof Florida domicile:

File a Declaration of Domicile with the Miami-Dade County Clerk of Court. This is a sworn legal document establishing your intent to make Florida your permanent home. Do this in the first 30 days after arriving.

Spend the majority of your time here. The 183-day rule matters, especially for former New Yorkers. Keep records — cell phone location data, credit card receipts, gym check-ins, anything that documents your physical presence. Some attorneys recommend keeping a travel log.

Cut genuine ties to your former state. Selling your old home is the strongest signal. If you keep a New York apartment “just in case,” New York will use that as evidence you never really left. The same applies to California, though their analysis is slightly different.

Move everything that matters. Bank accounts, brokerage accounts, voter registration, car registration, driver’s license, professional memberships, club memberships, religious affiliations, even where your pets are registered with the vet. Auditors check all of it.

Real Estate Gains in Miami

Miami’s real estate market has been one of the strongest in the country since 2020, and selling an appreciated property here carries zero state capital gains tax. Federal rules still apply: you get the Section 121 exclusion ($250,000 single / $500,000 joint) on your primary residence if you’ve lived there at least two of the last five years.

Investment properties don’t get the Section 121 exclusion, but you can defer the gain entirely using a 1031 exchange — swapping one investment property for another of equal or greater value. In Florida, the 1031 exchange is even more attractive because you’re only deferring the federal tax. There’s no state tax to manage alongside it.

Something to watch: if you sell a property you previously rented out, depreciation recapture is taxed at a flat 25% federal rate on the portion of gain attributable to depreciation. That rate applies regardless of how long you held the property, and the NIIT can stack on top of it.

Crypto and Alternative Assets

Florida’s zero state tax applies to all types of capital gains, including cryptocurrency, NFTs, collectibles, and alternative investments. Federally, crypto is treated as property — the same capital gains rules apply. Collectibles (art, wine, rare coins) get a higher maximum federal rate of 28% on long-term gains, but again, no state layer in Florida.

Miami’s growing crypto ecosystem has attracted a particular type of investor who benefits heavily from this. Someone sitting on $5 million in Bitcoin gains and living in Miami pays $1.19 million in federal tax. That same person in California would owe an additional $665,000 to the state. The difference funds a very nice house in Coconut Grove.