Wyoming Capital Gains Tax on Real Estate

By Skyline Capital Investments · Updated October 26, 2026 · 7 min read

Does Wyoming have a capital gains tax?

No. Wyoming does not tax personal income, and a capital gain is income, so the state takes nothing when you sell Wyoming real estate at a profit. That holds whether the gain is short-term or long-term and whether it comes from a Casper fourplex or a 40-unit complex in Cheyenne.

The federal government still taxes the gain in full. For most sellers of an apartment building, that means up to 20% on long-term gain, up to 25% on the part that reflects past depreciation, and the 3.8% net investment income tax. Wyoming simply adds nothing on top.

State tax vs federal tax on a Wyoming property sale

In most states a seller pays two income taxes on one gain. In Wyoming the state line on the worksheet is zero, which on a large sale is worth tens of thousands of dollars compared with the 4.1% rate Montana charges on most long-term gains next door.

There is also no state withholding at a Wyoming closing, because there is no state income tax to prepay. The only withholding a seller is likely to meet is federal: under FIRPTA, a buyer generally must withhold when the seller is a foreign person.

• No Wyoming income tax return is due because of the sale.
• No Wyoming form is needed to report or defer the gain.
• Your home state, if it is not Wyoming, may still tax you. See the section on owners who live elsewhere.

2026 federal capital gains rates for Wyoming sellers

Revenue Procedure 2025-32 sets the 2026 federal brackets. Long-term gain is taxed at 0%, 15% or 20% depending on where it lands on top of your other taxable income.

• Unrecaptured Section 1250 gain, the gain that reflects straight-line depreciation on a building, is taxed at your ordinary rate but no higher than 25%.
• The 3.8% net investment income tax applies once modified adjusted gross income passes $250,000 for a joint return or $200,000 for a single filer, unless the rental is part of a real estate professional’s trade or business.
• Gain on property held one year or less is short-term and is taxed at ordinary federal rates, from 10% to 37% in 2026.

Depreciation recapture on a Wyoming building

Recapture is a federal issue only for a Wyoming seller. The depreciation you claimed lowers your basis, so it comes back as gain when you sell, and the IRS taxes the straight-line part of that gain at up to 25%.

If you had a cost segregation study, items reclassified as 5-, 7- or 15-year property are Section 1245 property. Gain on them up to the depreciation taken is ordinary income, taxed at your full federal bracket rate, which can reach 37%. That can surprise owners who took large bonus depreciation in the first year. Because Wyoming has no income tax, there is no second state calculation to run on any of it. Ask your CPA for a depreciation schedule that splits the building from the short-life items before you price the sale, since the split changes your federal bill.

Owners who live in another state

Wyoming will not tax a nonresident on the gain from a Wyoming building, but the owner’s home state usually will. Most states with an income tax tax their residents on all income wherever it is earned, so a Colorado or Montana resident who sells a building in Laramie reports that gain at home.

Owners who move to Wyoming before a sale should be careful with timing. A state that taxed you while you owned the property may still claim gain you deferred there in an earlier 1031 exchange. Montana, for example, keeps the deferred gain on Montana property as Montana-source income under its Rule 42.2.308 and taxes it when it is recognized federally, even after you move.

Selling through an LLC or partnership

Most Wyoming apartment buildings are held in an LLC taxed as a partnership, and the federal result is the same as owning directly. The gain passes through to the members on their Schedule K-1s, and each member pays federal tax on their share at their own rates, including the 25% rate on unrecaptured Section 1250 gain and the 3.8% surtax where it applies.

Because Wyoming has no personal income tax, a member who lives in Wyoming has nothing further to file with the state on that share. A member who lives in an income-tax state reports the share at home. Before you list, collect each member’s state of residence and expected share of the gain so your CPA can plan estimated payments for the year of the sale.

Short-term gains and quick resales

A building held one year or less produces short-term gain, which the IRS taxes at ordinary rates instead of 15% or 20%. For 2026 the joint brackets climb from 10% to 37%, with 32% starting at $403,550 and 37% at $768,700 of taxable income.

That makes the holding period the most expensive date on a Wyoming flip. For a single filer, whose 35% bracket runs from $256,225 to $640,600, a $300,000 profit that lands entirely in that bracket costs $105,000 in federal tax as short-term gain, against $60,000 at the 20% long-term rate. Wyoming adds nothing either way, but waiting past the one-year mark can save more than any state rule could.

Worked example: selling a $2M apartment building in Wyoming

A married couple filing jointly bought a 20-unit building in Casper for $1,050,000 and has taken $420,000 of straight-line depreciation. They sell for $2,000,000 and pay $90,000 in commission and closing costs. Their adjusted basis is $630,000, so the gain is $1,280,000: $420,000 of unrecaptured Section 1250 gain and $860,000 of other long-term gain. Their other taxable income is $160,000.

Section 1250 gain is stacked on their ordinary income at their regular rates, capped at 25%. From $160,000 to $211,400 it is taxed at 22% ($11,308), from $211,400 to $403,550 at 24% ($46,116) and from $403,550 to $580,000 at the 25% cap ($44,113), for $101,537.

The $860,000 of long-term gain starts at $580,000 of income. The first $33,700, up to $613,700, is taxed at 15% ($5,055) and the remaining $826,300 at 20% ($165,260). The 3.8% net investment income tax applies to the smaller of the gain or the amount by which modified adjusted gross income passes $250,000. With the $32,200 standard deduction their MAGI is about $1,472,200, so the tax falls on $1,222,200: $46,444. The total federal tax is $318,296, and the Wyoming tax is $0.

What the zero state rate is worth

On the Casper sale, a 4.1% state rate would have cost $52,480 more, and a 5% flat state rate $64,000 more. That money stays with a Wyoming seller, which is one reason owners in neighboring states look at Wyoming buildings as 1031 replacements.

It does not make the sale cheap. The couple still owes about 25% of the gain to the IRS. On a building with a large gain and heavy depreciation, the federal bill alone is reason enough to look at deferral.

The state cost a Wyoming owner does carry is property tax. Wyoming assesses apartment buildings at 9.5% of market value, county assessors update values every year as of January 1, and counties collect half the tax by November 10 and half by May 10. At closing the current year’s bill is usually prorated between buyer and seller, so check which installments have been paid before you sign the settlement statement.

How a 1031 exchange changes the Wyoming tax bill

A 1031 exchange defers the federal tax, and for a Wyoming resident that is the whole tax. In the Casper example, buying a replacement worth at least $1,910,000, reinvesting all the net cash and replacing the debt would defer all $318,296.

There is no Wyoming form, filing or withholding waiver to arrange. The federal rules decide everything: 45 days to identify replacement property, 180 days to close and a qualified intermediary holding the money. Our 1031 exchange in Wyoming page covers the state angles, including exchanges from Montana and other clawback states, and the 1031 exchange rules guide covers the deadlines.

If you buy the replacement outside Wyoming, that state’s income tax can apply to future rent and to the gain when you sell the new property, so a Wyoming-to-Wyoming exchange keeps the state tax at zero going forward.

Other ways to manage the federal tax

Without a state tax to plan around, the choices are all federal.

• An installment sale spreads the gain over several years and can keep more of it in the 15% bracket.
• Holding until death gives heirs a stepped-up basis, wiping out the built-in gain and recapture.
• Records of every roof, boiler and parking lot project add to basis and cut the gain.
• Timing the sale for a year with lower other income can widen the 15% band.

Selling a Wyoming apartment building

Skyline buys apartment buildings with five or more units in Wyoming, in Cheyenne, Casper, Laramie, Gillette, Rock Springs and Sheridan. We buy directly, close on your timeline, and can work inside 1031 deadlines. If you are exchanging, we can set a closing date that gives you time to find the replacement first.

For the yearly carrying cost a buyer will look at, see our page on the property tax rate in Wyoming, and for the notice and deposit rules that come with your tenants, Wyoming landlord-tenant law for apartment owners.