StructuredSales.org
StructuredSales.org
Florida closings have a familiar cast. A couple who left Long Island, kept the rental in Nassau County "for a while," and now live under a homestead exemption in Collier County. A Tampa physician selling to a regional group. An owner of a small retail condo on the Gulf who is done being a landlord. None of them will write a Florida income-tax check on the capital gain. They can still write a large federal check, and they will pay documentary stamp tax on the deed whether or not the gain is spread.
A structured installment sale under IRC §453 is a federal tool here. It times recognition of long-term gain against the 0%, 15%, and 20% rates and the 3.8% net investment income tax. It can also shape retirement cash flow. It does not postpone the stamp tax on the deed, and it does not unwind a former state's claim on property that stayed behind.
Florida has no individual income tax, and the Tax Foundation's 2026 profile lists no estate or inheritance tax. The tax that still lands at the table is documentary stamp tax on deeds. Outside Miami-Dade, Florida Statutes section 201.02 charges 70 cents per $100, or fraction, of consideration, including mortgages on the property. Miami-Dade uses 60 cents per $100 plus a 45-cent surtax per $100, and the Department of Revenue says the surtax is not due when the document transfers only a single-family dwelling. On a $2 million commercial deed outside Miami-Dade that is $14,000, due because the deed is taxed. An installment schedule does not move it into later years.
Corporations are a different regime. Florida corporate income tax is 5.5% of Florida net income for taxable years beginning on or after January 1, 2022, after the $50,000 exemption the Department of Revenue describes. Pass-through income on an individual's return is not subject to a Florida personal income tax. An asset sale inside a C corporation, or an LLC taxed as one, can create entity-level tax before the owner computes federal gain. Ask which return the gain will actually hit.
Revenue Procedure 2025-32 sets 2026 joint long-term capital gains breakpoints at $98,900 and $613,700 of taxable income: 0%, then 15%, then 20%. The joint standard deduction is $32,200, plus $1,650 for each spouse who is 65 or older. The 3.8% NIIT applies to the lesser of net investment income or MAGI over $250,000 on a joint return. Pensions are generally outside net investment income. A lump-sum gain can still pull more Social Security into AGI, and a one-year MAGI spike can raise Medicare Part B and Part D premiums two years later through IRMAA. This page does not quote those premium brackets.
Under a structured installment sale the buyer pays the deferred portion at closing to an assignment company, which funds the seller's schedule with an annuity from a rated carrier. Each payment is reported on Form 6252 as basis, capital gain, and ordinary interest. The buyer can pay cash at closing instead of carrying a personal note, which matters when the buyer is a REIT or a group practice. Collection risk on a private note is covered in seller financing. Carrier risk is covered in the safety article.
Florida rentals and retail buildings are often full of depreciation. Section 1245 recapture, and section 1250 recapture properly so called, is ordinary income in the year of sale under section 453(i). Unrecaptured section 1250 gain can be recognized as payments arrive and is capped at 25%. A landlord who wants out should also read the 1031 comparison: an exchange defers gain only if replacement property is bought on time. On a residence, section 121 can exclude $500,000 of gain on a joint return when the tests are met. Gain above that exclusion is what a schedule can spread. See the home-sale article. Stamps are still due on the deed. Practice sales are often goodwill, with ordinary income for covenants and receivables. Allocation is covered in the medical-practice and business-sale notes.
Florida domicile is shown by days, homestead, license, registration, and where life actually is. New York still taxes you as a resident if you are domiciled there, and it treats you as a statutory resident if you keep a permanent place of abode in New York for substantially all of the year and spend more than 183 days there.
A completed move still leaves source income. New York Tax Law section 631 taxes a nonresident on New York real property, and it can treat an interest in a partnership, LLC, S corporation, or closely held C corporation as New York real property when New York realty and cooperative shares are at least half the assets. Form IT-2663's instructions require estimated tax on the gain reported in the sale year, with later installment years paid by voucher. New Jersey's GIT/REP payment on a nonresident's sale of New Jersey real property is estimated income tax, credited on the return, not a second tax with its own name. California Publication 1100 taxes installment gain on California real property after you leave. Interest on that note generally follows your new residence. Stock sold while you were a California resident can stay California-taxable on the gain portion after the move. Read the New York, New Jersey, and California guides before you time a closing around a license appointment. If you are still a resident of the old state on the day a Florida asset sells, that state taxes the gain for the resident part of the year. Georgia and Alabama do the same for property that stayed there.
A married couple, both 67 and Florida residents for several years, has $150,000 of other AGI from a pension and already-taxable Social Security, treated here as outside net investment income. The joint standard deduction is $32,200 plus $1,650 per spouse, or $35,500, so taxable income before the sale is $114,500. That is already above $98,900, so none of the gain is at 0%. They sell a retail condo. The table assumes no section 1245 recapture and prices the entire $1,800,000 at long-term capital gains rates. If part of the gain is unrecaptured section 1250 gain, tax in the 15% years would be higher, up to 25% on that slice. Recognition is all at once, or $200,000 a year for nine years. Brackets stay flat. Ordinary interest on the payments is excluded.
| 2026 federal estimate | Lump sum | Each of 9 years | Nine years combined |
|---|---|---|---|
| Long-term gain recognized | $1,800,000 | $200,000 | $1,800,000 |
| Gain at 15% | $499,200 | $200,000 | $1,800,000 |
| Gain at 20% | $1,300,800 | $0 | $0 |
| Long-term capital gains tax | $335,040 | $30,000 | $270,000 |
| NIIT at 3.8% | $64,600 | $3,800 | $34,200 |
| Estimated federal tax on this gain | $399,640 | $33,800 | $304,200 |
The difference is about $95,440 on these assumptions, before time value and tax on interest. Taxable income of $114,500 leaves $499,200 of room in the 15% band; the rest of a lump sum is at 20%. Each installment year, at $314,500 of taxable income, stays in the 15% band. Lump-sum NIIT is 3.8% of $1,700,000. An installment year, with MAGI of $350,000, pays NIIT on $100,000. Florida income tax is zero either way, and documentary stamps are a closing cost either way. The calculator sketches the federal comparison only.
Section 453(e) can accelerate gain if a related buyer resells within two years. Section 453(g) generally blocks installment treatment on depreciable property sold to a related person. Section 453A interest can apply when installment obligations exceed $5 million, with an exception for farm property and personal-use property. A retail condo is neither, and a pledge can count as a payment. Dealers are outside section 453. For the paycheck question, see sale proceeds as retirement income.
Florida has no individual income tax, so an individual seller does not add a state rate to long-term capital gain. A C corporation can still owe Florida corporate income tax at 5.5% on Florida net income above the statutory exemption. Federal capital gains rates and the 3.8% net investment income tax still apply.
No. Documentary stamp tax on a deed is computed on the consideration for the transfer and is paid when the document is taxed, generally at recording. Outside Miami-Dade the rate is 70 cents per $100 or fraction of consideration. Miami-Dade uses 60 cents per $100 plus a 45-cent surtax per $100, and the surtax is not due on a document that transfers only a single-family dwelling. An installment schedule does not defer that cost.
It depends on what was sold and on whether New York still treats you as a resident. Gain from New York real property, and from certain entity interests that are mostly New York real property, is New York-source income of a nonresident. New York also treats you as a resident if you are domiciled there, or if you maintain a permanent place of abode in the state for substantially the whole year and spend more than 183 days there. A Florida homestead and driver's license are facts in a domicile case, not a switch that turns New York tax off.
Section 1245 recapture, and section 1250 recapture properly so called, is ordinary income in the year of sale and cannot be spread. Unrecaptured section 1250 gain, the depreciation on real property that is not recaptured as ordinary income, can be reported as installment payments arrive and is taxed at a federal maximum of 25%. Personal property in the building often produces year-of-sale recapture. A tax advisor should separate the two.
A single-year gain can fill the 20% federal long-term band, trigger the 3.8% net investment income tax, pull more Social Security into taxable income, and raise Medicare premiums two years later through the IRMAA lookback. Spreading recognition under IRC §453 can change those federal results. It does not change Florida income tax, because that rate is already zero, and the figures are estimates that depend on the seller's other income.
Last reviewed: October 22, 2026. Federal figures follow Revenue Procedure 2025-32. Stamp-tax and corporate-tax descriptions follow the Florida Department of Revenue pages linked above.
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