New York taxes capital gains as ordinary income, up to 10.9% at the state level, and more inside New York City. Stack that on federal capital gains and the 3.8% NIIT, and a one-year sale can lose well over a third. Here's how to spread 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.
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📞 Hans Goldstein · 213-290-4977 · CA Insurance License #4322192 · Independent §453 specialist · Goldstein & Co. LLC
New York is one of the most expensive states in the country to realize a large gain. The state taxes capital gains as ordinary income up to 10.9%, and New York City residents pay an additional local tax on top. Add the federal capital gains rate (up to 20%) and the 3.8% NIIT, and a business sale, building sale, or appreciated-asset sale can lose well over a third in a single year.
High asset values plus one of the nation's highest combined tax burdens means a large unrealized gain becomes a large tax bill the moment you sell, whether it's a Manhattan co-op held for decades, an upstate rental portfolio, or a business you're exiting.
A §453 structured installment sale lets you receive your sale proceeds, and recognize the gain, over a schedule of future years instead of all at once. Spreading the gain keeps more of it in lower brackets, softens the 3.8% surtax, and reduces the New York (and NYC) tax bite in the deferred years, with guaranteed payments backed by an A-rated carrier. It's a federal statute, so it applies fully in New York, and unlike a 1031, you don't have to buy a replacement property.
In a high-tax state like New York, spreading the gain matters more than almost anywhere. Estimate your number with the capital gains tax calculator, then plan the structure before you sign.
New York taxes capital gains as ordinary income, up to 10.9% at the state level, with an additional local tax for New York City residents. This is on top of federal capital gains (up to 20%) and the 3.8% NIIT, a combined burden that can exceed a third of the gain.
Yes. A §453 structured installment sale spreads the proceeds and the gain over multiple years, lowering the federal, New York, and NYC tax in the deferred years. It's a federal strategy that applies fully in New York.
Yes. NYC residents pay a local income tax in addition to New York State tax, and since both treat capital gains as ordinary income, city residents face an even higher combined rate.
It depends on your goal. A 1031 works for like-kind real estate if you reinvest on schedule. A structured installment sale works if you want to exit, are selling a business or stock, or can't find a replacement property.
Use the free capital gains tax calculator, select New York, and it estimates federal + state + NIIT + recapture, then shows how much you'd save by 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 →