Massachusetts looks like a flat 5% state, until a big sale pushes you over $1M and the 4% 'millionaire surtax' kicks in, making it 9%. Spreading the gain can keep you under that line. Here's how.
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 · 213-340-2018 · CA Insurance License #4322192 · Independent §453 specialist · Goldstein & Co. LLC
Massachusetts taxes income at a flat 5%, but since 2023 a 4% surtax applies to income over $1 million (the "millionaire surtax" / Fair Share Amendment). A large capital gain is income, so a single big sale can push you over that line and be taxed at a combined 9% state rate, plus federal (up to 20%) and the 3.8% NIIT.
Send me the sale price and rough basis and I'll email you the actual number within one business day — plus the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation · the carrier compensates the broker, not you.
The 4% surtax is triggered entirely by crossing $1M of income in a year. A business sale, building sale, or large stock gain can blow past it in one shot, turning a 5% state tax into 9% on the portion over $1M. It's a textbook case for spreading income across years.
A §453 structured installment sale spreads the gain across future years. By keeping each year's income under the $1 million surtax threshold where possible, you can avoid much of the 4% surtax, while also lowering your federal bracket and the 3.8% NIIT. Payments are carrier-backed and guaranteed.
In Massachusetts, the difference between a one-year sale and a spread sale can be the entire 4% surtax. Estimate it on the calculator and structure before you sign.
Massachusetts taxes capital gains at a flat 5%, plus a 4% surtax on income over $1 million, so large gains can face a combined 9% state rate. 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 Massachusetts. Keeping each year's income under $1M can avoid much of the 4% millionaire surtax.
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 Massachusetts, 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 →
Hans Goldstein · Goldstein & Co.
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