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Nebraska is one of the few states where the installment calendar and the rate statute are aimed at the same date. For a tax year that begins in 2026, the top individual rate is 4.55%. For a tax year that begins on or after January 1, 2027, that top rate is 3.99%. Both numbers are in Nebraska Revised Statute § 77-2715.03. They are not a revenue trigger waiting on a forecast. A gain recognized in December 2026 and the same gain recognized in January 2027 are taxed at different statutory rates, unless the legislature changes the law before the later return is filed.
The typical large Nebraska gain is a farm or a ranch. Irrigated corn along the Platte, Sandhills grass, and feedlot-adjacent ground have been appreciating in family hands for decades. Allocation, recapture, and installment reporting of the land are the work in the farmland sale article. Nebraska does not add Iowa's retired-farmer exclusion. Iowa's guide is the comparison: some Iowa operators can elect out of Iowa tax on qualifying farmland. A Dawson County or Custer County seller cannot. Nebraska tax applies at the rate for the year the gain is recognized.
The Department of Revenue's 2026 individual income tax calculation schedule, for married filing jointly, is:
Single filers reach 4.55% above $24,760. The last single bracket starts at $39,900 and is still 4.55%. Section 77-2715.03 sets both the third and fourth rates at 3.99% for tax years beginning on or after January 1, 2027. Dollar thresholds inflate; the rates do not. A seller already in the top bracket pays that rate on the entire gain. Restarting the 2.46% and 3.51% slices is worth little once wages, cash rent, or a pension have filled them.
Top rate on capital gain, which Nebraska taxes as ordinary income: 4.55% for 2026 and 3.99% for 2027 and after, under current statute. The employer-stock election can zero the Nebraska tax on one company's shares. It does not apply to the quarter-sections.
There is no general Nebraska exclusion for long-term gain and no special farm-asset percentage. The Department's January 1, 2026 chronology lists standard deductions of $8,850 single and $17,700 joint, and a personal exemption credit of $176. Those figures do not change the top rate on a multi-million-dollar gain.
Section 77-2715.09 lets a resident elect, once in a lifetime and for one corporation, to subtract extraordinary dividends and capital gain on that company's capital stock. The stock must have been acquired on account of employment by the corporation, or while the individual was employed there. At the first sale or dividend under the election, the corporation must have been actively doing business in Nebraska for at least three years, have at least five shareholders, and not have more than 90% of its stock held by one shareholder or a related group. Form 4797N is the election. The Department treats inherited stock as non-qualified. Options and warrants are not capital stock. A spouse or descendant who received qualifying shares by gift can be covered; that form question is not a reason to treat a ranch buyout as covered.
An employee of a Nebraska manufacturer, a co-op, or a family C corporation who is selling payroll-era shares should have the preparer read 77-2715.09 before anyone models 4.55%. If the election fits, Nebraska tax on that gain can be zero, and an installment sale is a federal-bracket and cash-flow tool. Grassland, irrigated cropland, and equipment are outside it. Equipment still produces § 1245 recapture in the year of sale, taxed as ordinary income at up to the top rate, and that recapture cannot be installment gain.
Nebraska taxable income starts from federal adjusted gross income. Form 6252 gain is taxed at the § 77-2715.03 rate for the year it is recognized. A 2026 closing that pays principal through 2033 puts one-eighth of a level gain, in the illustration below, on the 4.55% rate and seven-eighths on the 3.99% rate. The Unicameral can still amend 3.99%. The estimate uses the statute as written.
Nonresidents pay Nebraska income tax on Nebraska-source income. Real property in Nebraska stays Nebraska-source after a move to South Dakota, Wyoming, or Texas, none of which taxes individual income. Installment principal from that land is still a Nebraska return, at the rate for the year it is recognized.
Holding until death raises a different tax. Nebraska has no state estate tax. Counties collect an inheritance tax. For deaths on or after January 1, 2023, section 77-2004 taxes what an immediate relative receives, above $100,000 per person, at 1%. That class includes parents, grandparents, siblings, children, and other relatives the statute lists. A surviving spouse is exempt, and so is a qualifying relative under age 22. More remote beneficiaries are taxed under separate sections at higher rates. On a large farm, 1% above $100,000 per child is still much smaller than income tax on the full appreciation. The trade is selling versus holding for a stepped-up basis. The inheritance-tax return goes to the county, not onto Form 1040N.
A married couple sells cropland for $3,200,000. Basis is $400,000. Long-term gain is $2,800,000. None of it is employer stock, and none of it is § 1245 recapture; machinery is assumed to be a separate closing-year bill. Other adjusted gross income is $152,200, so other federal taxable income after the $32,200 standard deduction is $120,000. That is already above Nebraska's $79,800 joint top-bracket threshold for 2026, so the estimate taxes the entire gain at the top rate and does not inflate later thresholds. The contract price is under $5 million, so the § 453A interest charge is left out. Interest on the deferred price is left out; it would be ordinary income.
The installment version recognizes $350,000 of gain a year for eight years, 2026 through 2033, which is an 87.5% gross-profit percentage on $400,000 of principal a year. Federal long-term tax on the lump sum is $74,055 on the $493,700 that fits in the 15% band above $120,000 of other taxable income, plus $461,260 on the $2,306,300 that is taxed at 20%, which is $535,315. Net investment income tax is 3.8% of $2,702,200, or $102,684. Federal lump-sum tax on the gain is $637,999. Each installment year taxes $350,000 at 15% ($52,500) and owes about $9,584 of net investment income tax. Eight years total $496,669 of federal tax.
Nebraska lump-sum tax at 4.55% is $127,400. The 2026 installment slice at 4.55% is $15,925. Each of the seven later years at 3.99% is $13,965, or $97,755, so Nebraska installment tax is $113,680. The $13,720 difference exists only because seven years use the enacted 2027 rate. A lump sum recognized entirely in 2027 or later would itself use 3.99%, and this state gap would not appear.
| Tax on the $2.8 million gain | All in 2026 | 2026–2033 installment |
|---|---|---|
| Federal long-term capital gain tax | $535,315 | $420,000 |
| Federal 3.8% net investment income tax | $102,684 | $76,669 |
| Nebraska income tax | $127,400 | $113,680 |
| Combined | $765,399 | $610,349 |
The combined difference is about $155,050. Roughly $141,330 is federal: the lump sum fills the 20% bracket and a larger 3.8% base, while each installment year stays at 15% plus a smaller 3.8% amount. Roughly $13,720 is the statutory gap between the 2026 rate and later years. Heirs should measure basis under selling inherited farmland before treating $400,000 as anything but an example. A sale to a child or a nephew's operation has to be tested under the related-party rule of § 453(e). The county inheritance tax is outside this income-tax table. It is computed on what each beneficiary receives, and it belongs in the hold-versus-sell meeting.
4.55%. For tax years beginning in 2026, Nebraska Revised Statute 77-2715.03 sets both the third and fourth bracket rates at 4.55%. For tax years beginning on or after January 1, 2027, both of those rates are 3.99%. There is no separate long-term capital-gains rate. On the Department of Revenue's 2026 tax calculation schedule for joint filers, 4.55% applies once Nebraska taxable income passes $49,530, and the top bracket on that schedule starts at $79,800.
Under the statute as it stands, yes. Nebraska tax for a year uses that year's rates. Gain recognized in 2026 is computed under the 4.55% top rate. Gain recognized in 2027 or a later year is computed under the 3.99% top rate. The legislature can amend the statute. The 3.99% figure is enacted law for those years, not a revenue trigger that still has to fire.
Not for the land. Section 77-2715.09 allows one lifetime election to subtract gain on the capital stock of one corporation, if the individual acquired that stock on account of employment by the corporation or while employed there. The corporation must have been actively doing business in Nebraska for at least three years, have at least five shareholders, and not have more than 90% of the stock held by one shareholder or a related group. Form 4797N is the election. Farmland, a partnership interest, and stock the seller inherited are outside that election.
Nebraska does not impose a state estate tax. Counties collect an inheritance tax. For deaths on or after January 1, 2023, an immediate relative described in section 77-2004 pays 1% of the clear market value received above $100,000. Property passing to a surviving spouse is not taxed, and property passing to a qualifying relative under age 22 is not taxed. More remote beneficiaries are taxed under separate sections at higher rates. The inheritance tax is not a reason to ignore income tax, and income tax is not a reason to ignore the inheritance tax.
South Dakota does not tax individual income. Nebraska taxes nonresidents on Nebraska-source income, and gain on Nebraska real property is Nebraska-source income. Installment principal from that land is reported in the year it is recognized, at that year's Nebraska rates. Moving does not move the land.
Last reviewed: October 22, 2026.
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