Arizona taxes capital gains as ordinary income (2.5%), and that stacks on federal capital gains and the 3.8% NIIT. Here's how to spread the gain across years and keep more of it.
A plain-English guide for sellers: how a structured installment sale defers the tax when you sell a business, practice, or property — the math, the alternatives, and how to know if your deal fits.
Drop your info — instant PDF download + within 1 business day Hans will email a preliminary read on which structure fits your deal. No retainer. Carrier compensates the broker — not you.
📞 Hans Goldstein · 213-290-4977 · CA Insurance License #4322192 · Independent §453 specialist · Goldstein & Co. LLC
Arizona taxes capital gains as ordinary income, a flat 2.5% (one of the lowest). On its own that may sound modest, but stacked on the federal rate (up to 20%) and the 3.8% Net Investment Income Tax, a one-year sale of a business, building, or appreciated asset still takes a serious bite. Arizona's low 2.5% flat rate is a draw for retirees and business owners, but the federal 20% plus the 3.8% NIIT on a big gain is still the bulk of the tax.
The federal tax, the 3.8% surtax, and your Arizona tax are all driven by recognizing the gain in a single year. A §453 structured installment sale lets you receive the proceeds, and pay the tax, over a schedule of future years, keeping more of the gain in lower brackets, reducing the 3.8% surtax, and lowering the Arizona tax in the deferred years. Payments are backed by an A-rated carrier, and because it's a federal statute it works fully in Arizona.
Wherever you are in Arizona, the move is the same: estimate your number on the calculator, then plan the structure before you sign.
Arizona taxes capital gains as ordinary income, a flat 2.5% (one of the lowest). This is on top of the federal rate (up to 20%) and the 3.8% NIIT.
Yes. A §453 structured installment sale spreads the proceeds and gain over multiple years, lowering the federal and state tax in the deferred years. It's a federal strategy that works in Arizona.
A 1031 works for like-kind real estate if you reinvest on schedule. A structured installment sale fits if you want to exit real estate, are selling a business or stock, or can't find a replacement property.
Yes, prior depreciation is recaptured at sale (ordinary income or up to 25% federally) and is generally recognized in the year of sale even in an installment sale. The capital-gain portion is what gets spread.
Use the free capital gains tax calculator, select Arizona, and it estimates federal + state + NIIT + recapture, then shows the savings from deferring.
Before you sign anything, run your numbers with someone who structures the deal to be tax-smart and audit-ready from day one.
Call 213-340-2018 Run the Numbers →