North Dakota taxes capital gains as ordinary income (2.5%) — stacked on federal capital gains and the 3.8% NIIT. Here's how to spread the gain across years and keep more of it.
North Dakota taxes capital gains as ordinary income — up to ~2.5%. North Dakota offers a generous capital-gains exclusion and low top rate. 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 takes a serious bite.
The federal tax, the 3.8% surtax, and your North Dakota 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 future years, keeping more of the gain in lower brackets, reducing the surtax, and lowering the North Dakota tax in the deferred years. Payments are backed by an A-rated carrier, and because it's a federal statute it works fully in North Dakota. Unlike a 1031, no replacement property is required.
Estimate your number on the calculator (select North Dakota), then plan the structure before you sign.
North Dakota taxes capital gains as ordinary income, up to ~2.5%. 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 North Dakota tax in the deferred years. It's a federal strategy that works in North Dakota.
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 and 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 North Dakota, 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 213-414-2808 Run the Numbers →