StructuredSales.org
StructuredSales.org
New Hampshire never taxed wages, and it never taxed capital gains on an individual return. What it did tax, until recently, was interest and dividends. That tax is repealed for periods beginning on or after January 1, 2025. The repeal is easy to misread. It did not "turn off" a capital-gains tax that was not there. It did turn off a 3% levy that could have reached the ordinary interest inside an installment payment. The taxes that still touch a Seacoast machine shop, a Lakes Region inn, or a Coös timber tract are different: the business profits tax, the business enterprise tax, the real estate transfer tax, and, if trees are cut, the timber yield tax.
A structured installment sale under IRC §453 is therefore a federal project for an individual seller, plus a cash-flow project. The 0%, 15%, and 20% long-term rates and the 3.8% net investment income tax are the brackets in play. Whether the company itself owes business profits tax on an asset sale is a separate return, and it is often the number that decides stock sale versus asset sale.
The Department of Revenue Administration's notice on the repeal is specific. For tax periods beginning on or after January 1, 2025, residents no longer pay the Interest and Dividends Tax. The last rate, for periods ending on or after December 31, 2024, was 3%, on interest and dividends above $2,400 single or $4,800 joint, with exemptions for some older and disabled residents. Capital gains were not in that base. Years through 2024 can still be audited. For a seller who will receive installment interest in 2026 and later, that interest is no longer a New Hampshire personal-tax item. It is still ordinary income on the federal return, and it can still be net investment income.
The Business Profits Tax remains 7.5% for taxable periods ending on or after December 31, 2023. It reaches enterprises organized for gain that carry on business activity in the state. The Department's 2025 overview puts the filing threshold at gross business income over $109,000 for periods beginning January 1, 2025, adjusted on a CPI schedule. For periods ending on or after December 31, 2022, apportionment for multi-state businesses is sales-factor only. Gain that sits inside a business's federal taxable income — an asset sale by a proprietorship, partnership, or corporation — can be business profits even though the owner, wearing an individual hat, pays no New Hampshire tax on investment gain. A sale of stock by a shareholder is often outside that base. "Often" is not "always." Get the character settled before the letter of intent hardens.
The Business Enterprise Tax is 0.55% of the enterprise's compensation, interest, and dividends paid, for periods ending on or after December 31, 2022. The Department's overview sets a filing threshold of gross receipts or an enterprise-value tax base over $298,000 for periods beginning January 1, 2025. BET paid is a credit against the profits tax. A company still paying wages in the year it sells will often still owe it. The seller's personal installment interest is not in that base.
Real estate transfer tax under RSA 78-B is 75 cents per $100 of price or consideration, imposed on the buyer and again on the seller. On an $800,000 Lakes Region parcel, each side owes $6,000. Stamps go on the deed at the registry. Section 453 does not move that cost into the years you receive payments. A timber yield tax, generally 10% of stumpage under the Department's overview of RSA 79, is due when trees are cut. It is a different event from selling the land.
For 2026, Revenue Procedure 2025-32 sets joint long-term breakpoints at $98,900 and $613,700 of taxable income. The joint standard deduction is $32,200. NIIT of 3.8% applies to the lesser of net investment income or MAGI over $250,000. In a structured sale the buyer pays the deferred price at closing to an assignment company. The seller reports later payments on Form 6252. Basis returns tax-free, gain is capital, interest is ordinary. The seller's payments come from a rated carrier's annuity, a different credit risk from the buyer's note. Details are in what the structure is and seller financing.
Illustration, not a quote. A married couple, both under 65, lives in New Hampshire and sells stock of a closely held manufacturer they have held for years. Other AGI is $210,000 of wages, treated as outside net investment income. Taxable income before the gain is $210,000 minus $32,200, or $177,800, so the 0% band is already gone. Long-term gain on the stock is $1,600,000, all in 2026 or as $200,000 a year for eight years. The table assumes the gain is reported on their individual return and is not also in a business-profits-tax base. An asset sale inside the company could add the 7.5% profits tax, and a C corporation could add federal corporate tax. Those layers are omitted on purpose. Brackets stay flat, installment interest is omitted, and a noncompete is ordinary and outside this table.
| 2026 federal estimate | Lump sum | Each of 8 years | Eight years combined |
|---|---|---|---|
| Long-term gain recognized | $1,600,000 | $200,000 | $1,600,000 |
| Gain at 15% | $435,900 | $200,000 | $1,600,000 |
| Gain at 20% | $1,164,100 | $0 | $0 |
| Long-term capital gains tax | $298,205 | $30,000 | $240,000 |
| NIIT at 3.8% | $59,280 | $6,080 | $48,640 |
| Estimated federal tax on this gain | $357,485 | $36,080 | $288,640 |
The spread is about $68,845 of federal tax on these assumptions, before time value and before tax on interest. Taxable income of $177,800 leaves $435,900 of room before the 20% band at $613,700. Each installment year, at $377,800 of taxable income, stays at 15%. Lump-sum NIIT is 3.8% of $1,560,000 (MAGI of $1,810,000 minus $250,000). An installment year has MAGI of $410,000, so NIIT applies to $160,000. New Hampshire individual income tax adds nothing. Transfer tax, if real estate is in the deal, is paid at the registry either way. Model your own split of stock, assets, and covenants with the calculator and a CPA who will sign the business-profits return.
New Hampshire residency does not re-source a Massachusetts building, a Massachusetts business, or wages for work performed in Massachusetts. Massachusetts taxes a nonresident's gain, and the interest, on an installment note from Massachusetts real property. Sales of $1 million or more can require withholding. If Massachusetts still considers you a resident — domicile is where you intend to remain, shown by the whole of your life — it taxes worldwide income, including gain on a New Hampshire asset, for the resident period. Maine and Vermont do the same with property left there. New York reaches New York real property and some entity interests that are mostly New York real estate, and it has a statutory-resident day count. New Jersey requires an estimated payment when a nonresident sells New Jersey real property. California Publication 1100 taxes installment gain on California real property after you leave, and it can keep the gain on stock sold while you were a resident. Oregon, Minnesota, and Illinois tax nonresidents on in-state real property as well. Change domicile with advice, and time the closing against facts you can prove.
Section 453(i) recognizes section 1245 recapture in the year of sale. That is the equipment on the shop floor, not the stock. Section 453(e) can accelerate gain on a related-party resale within two years. Section 453(g) generally blocks installment reporting on depreciable property sold to a related buyer. Section 453A interest applies when non-farm installment obligations exceed $5 million. A personal residence and property used or produced in farming are outside that charge. A manufacturing company is not. See the interest-charge calculator and, for the income the schedule is supposed to replace, retirement income from a business sale. Price allocation is covered in minimizing tax on a business sale.
The Interest and Dividends Tax never applied to capital gains or to wages. It applied to interest and dividend income above a filing threshold, and the Department of Revenue Administration says it is repealed for tax periods beginning on or after January 1, 2025. An individual's long-term capital gain was already outside that tax. The repeal does matter for the ordinary interest portion of installment payments received by a New Hampshire resident, which is no longer subject to that levy.
Yes, it can. The Business Profits Tax is 7.5% of taxable business profits for periods ending on or after December 31, 2023, for enterprises with gross business income over the filing threshold. Gain that is part of a business enterprise's federal taxable business income can fall into that base even though New Hampshire does not tax an individual's investment gain. A stock sale by an individual and an asset sale by the company are different transactions. Have a New Hampshire advisor sort which return reports the gain before the purchase agreement is signed.
Yes. The real estate transfer tax is imposed on both buyer and seller at 75 cents per $100 of the price or consideration. It is paid when the transfer is recorded. An installment sale under IRC §453 does not spread that tax across the payment years.
No. Massachusetts taxes nonresidents on Massachusetts-source income, including gain from Massachusetts real property. Installment gain and the interest on that note generally stay Massachusetts-source. New Hampshire residency also does not help if Massachusetts still treats you as a resident. California, New York, New Jersey, Oregon, Minnesota, and Illinois apply their own sourcing rules to property and businesses left behind.
Long-term capital gains are taxed at 0%, 15%, or 20% depending on taxable income, plus the 3.8% net investment income tax above the statutory MAGI thresholds. Depreciation recapture is taxed in the year of sale. The section 453A interest charge can apply when installment obligations exceed $5 million. Those federal rules are the reason a schedule can change the bill. They are estimates until your own income is in the model.
Last reviewed: October 22, 2026. Business-tax thresholds in the Department's January 2025 overview are CPI-adjusted; confirm the figure for the year of sale. Whether a specific stock sale is inside the business profits tax was not treated as a blanket rule.
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