Conducting a 1031 exchange in Colorado isn't unique relative to most states in the U.S. The rules and processes for a 1031 exchange, as outlined in Section 1031 of the Internal Revenue Code, apply uniformly across all 50 states. This means that the fundamental requirements, such as the need for the properties involved to be held for investment or productive use in a trade or business, and the like-kind nature of the exchanged properties, remain consistent whether the exchange involves properties in Colorado or elsewhere in the country.
The Combined Rate accounts for Federal, State, and Local tax rate on capital gains income, the 3.8 percent Surtax on capital gains and the marginal effect of Pease Limitations (which results in a tax rate increase of 1.18 percent).
Colorado has a flat income tax rate of 4.63% of federal taxable income, regardless of income level.
