What it applies to
- Long-term capital gains on the sale of assets such as stocks and bonds
- Allocated to Washington broadly by the taxpayer’s residence at the time of sale for intangible assets
- Only gains above a substantial annual standard deduction, which is adjusted for inflation
What it does not apply to
- Real estate — sales of real property are excluded
- Retirement accounts — 401(k), IRA and similar are excluded
- Short-term gains — the tax reaches long-term gains
- Certain family-owned small business sales, subject to conditions
- Livestock, timber and some agricultural property, subject to conditions
| Gain above the standard deduction | Rate |
|---|---|
| Up to $1 million | 7% |
| Above $1 million | 9.9% |
How it interacts with an Oregon move
This is where cross-border planning gets genuinely interesting, and genuinely easy to get wrong. Moving from Oregon to Washington before a large securities sale can move the gain out of Oregon’s income tax — and potentially into Washington’s capital gains tax, which for a very large gain is not obviously the better outcome. The arithmetic depends on the size of the gain, the Oregon marginal rate, the Washington standard deduction and whether any exclusion applies.
Do I file a Washington return for this?
Yes — where you owe it, there is a Washington capital gains return, filed separately from your federal return and generally due at the same time.
Does the standard deduction apply per person or per return?
The deduction applies per individual, and married couples filing jointly do not double it. Confirm the current figure with the Department of Revenue — it is indexed.
What about selling a rental property in Washington?
Real property is excluded from the Washington capital gains tax. Federal tax and depreciation recapture still apply, and if you are an Oregon resident, Oregon taxes the gain on worldwide income.
I sold a business. Is that covered?
It depends on the structure of the sale and whether a family-owned small business exclusion applies. This is a case for advice before signing, not after closing.
Get the sourcing right before you file
Cross-border returns turn on facts nobody asks you about until it is too late. An appointment settles which state taxes what.
Sources for the figures on this page
Written by
Enrolled Agent, Oregon Licensed Tax Consultant
License number: Enrolled Agent 00160070-EA · Oregon Licensed Tax Consultant 35746-C
Heather has spent more than a decade preparing individual and business returns across the Portland metro and the Columbia Gorge, and holds unlimited rights to represent taxpayers before the IRS.
Last reviewed
This page is general information about Oregon, Washington and federal tax rules, not advice about your own return. Thresholds and rates change every year. Figures were verified as of August 2026 — check the linked official sources, or talk to us about your situation.