Which US States Generate the Highest Returns From Investment Activities?

When you sell stocks, bonds, real estate, or other assets, the profits you pocket represent realized gains—money that truly impacts your wealth. However, where you live across the US can significantly influence how much you’re actually taking home from investment portfolios. Recent data reveals striking disparities in investment income across different states, with some regions outpacing others by tens of thousands of dollars annually.

Understanding Investment Income Components

Investment earnings come in multiple forms beyond just capital gains. When SmartAsset analyzed the latest IRS tax return data from 2022, they factored in several categories: net capital gains (the core profit from asset sales), taxable interest income, tax-exempt interest (typically from municipal bonds), ordinary dividends, and qualified dividends. This comprehensive approach reveals the full picture of how investment activity translates into actual wealth across the country.

The gap between states is substantial. Top-performing regions show investment income averaging between $80,000 to $85,000 annually, while middle-tier states fall in the $40,000 to $52,000 range. This variation reflects differences in population wealth distribution, investment sophistication, and regional economic composition.

The Top Investment States: Where Americans Earn the Most

Florida leads the nation with average net capital gains of $84,911. Beyond capital appreciation, Florida residents report $5,552 in taxable interest, $15,226 in tax-exempt interest, $21,724 in ordinary dividends, and $17,828 in qualified dividends. The combination of these income streams highlights why Florida consistently ranks at the top for investment earnings.

Wyoming follows closely with average net capital gains of $84,246, complemented by $4,804 in taxable interest, $12,016 in tax-exempt interest, and notably higher dividend income at $30,728 for ordinary dividends and $26,119 for qualified dividends. The concentration of dividend income in Wyoming suggests a different portfolio composition among residents.

Nevada ranks third with $77,491 in average net capital gains, along with $4,395 in taxable interest, $12,978 in tax-exempt interest, $17,308 in ordinary dividends, and $13,756 in qualified dividends. These figures demonstrate consistent strength across multiple investment income categories.

The Rising Mid-Tier Performers

Texas, Utah, and Connecticut form a strong second tier. Texas shows $52,926 in average net capital gains with $13,420 in ordinary dividends. Utah reports $51,745 in average net capital gains with more moderate dividend activity at $10,015. Connecticut, despite lower net capital gains at $49,914, demonstrates the highest dividend income at $18,385 in ordinary dividends and $15,312 in qualified dividends—reflecting portfolios weighted toward income-producing securities.

New York generates $48,271 in average net capital gains, supported by $4,110 in taxable interest and substantial dividend income of $14,987 ordinary and $11,626 qualified dividends. Massachusetts similarly reports $47,346 in average net capital gains with $13,507 in ordinary dividends.

Understanding the Broader Investment Landscape

States like California ($45,490 in net capital gains), Tennessee ($44,834), New Hampshire ($44,235), Idaho ($41,085), and Colorado ($40,367) still demonstrate significant investment activity, with average net capital gains ranging from $40,000 to $46,000. While lower than leading states, these figures underscore that investment income matters across much of the nation.

The variation in investment returns reflects several factors: population wealth demographics, prevalence of investment-active residents, concentration of capital gains from real estate and equity transactions, and different portfolio allocation strategies across regions. States with larger populations of retirees and high-net-worth individuals typically show elevated investment income figures.

What This Means for Investors

The data reveals that investment performance and realized gains aren’t uniform across the US. Geographic location can influence both opportunities for wealth accumulation and the composition of investment portfolios. Whether driven by capital appreciation in real estate or equity markets, dividend-heavy portfolios, or diverse income streams, residents in top-performing states are clearly extracting substantial returns from their investment activities.

Understanding your state’s investment landscape, along with local tax implications for capital gains and investment income, can help inform both portfolio strategy and financial planning decisions.

Data Source: SmartAsset analysis of IRS tax return data (2022 tax year), released in 2025