Calculation methodology

1. Establish the gain

Gain is proceeds minus adjusted basis and approved selling costs. A negative result is shown as a sale loss; this worksheet does not calculate loss deductions, refunds or future carryovers. Approved federal exclusions and offsets attributable to the gain are entered separately. Their sum cannot exceed the gain. State-only exclusions must stay in the state preparation.

2. Compare federal income tax

For an ordinary long-term sale, the model computes tax on entered ordinary taxable income plus other preferential income, then repeats the calculation with the approved sale gain. It stacks the preferential category through the 0%, 15% and 20% bands and compares the result with taxing all income at ordinary rates, taking the smaller amount. For a short-term sale it adds the gain to ordinary income, allowing existing preferential income to cross its own bands.

Rates and thresholds come from IRS Revenue Procedure 2025-32, sections 4.01 and 4.03. Other ordinary taxable income, deductions and preferential items are held fixed. This is an incremental income-tax worksheet before credits, alternative minimum tax and unmodeled return effects. Collectibles, recapture and special-rate stock require separate calculations.

3. Compare NIIT independently

In each scenario, NIIT is 3.8% of the smaller of entered net investment income or MAGI above the filing threshold. The thresholds are $200,000 for single and head of household, $250,000 joint and $125,000 separate. The difference between the two computed amounts is the modeled NIIT change. IRS NIIT guidance supplies these rules. Taxable income is not automatically MAGI.

4. Resolve state scope

All 50 states and DC accept independently prepared final liabilities with and without the sale. Confirmed no-individual-income-tax resident modes are limited to Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. They do not eliminate another jurisdiction’s source-income tax or entity-level taxes.

Georgia, Illinois, Iowa, Kentucky, Louisiana, North Carolina, Pennsylvania and Utah offer their verified flat-rate calculations on entered prepared state taxable bases before credits. Washington applies 7% to entered annual taxable gains and another 2.9% above $1 million, after externally approved exemptions and deductions, before credits. Credit changes or nonresident allocations require the final-liability comparison.

Massachusetts resident categories and surtax

The standard full-year resident mode repeats the actual 2026 Form 1-ES rate-category estimate before and after the sale. It taxes approved other 5% income, short-term gains at 8.5%, taxable special gains at 12%, and ordinary long-term gains at 5%, with each income amount entered once after state netting, deductions and exemptions. The current agency surtax guidance supplies the verified $1,107,750 threshold and the sum of positive taxable parts. Complete approved nonnegative balances are required; the worksheet does not invent cross-part loss offsets. Usable ordinary nonrefundable credits are separately prepared with their eligibility and surtax restrictions. Blank credits preserve computed regular tax and surtax but leave final liability unknown. No Tax Status, 3% qualifying stock, refundable credits, residency allocation and special return effects require prepared final liabilities. Cent-based estimate rounding can differ from a final return table.

Ohio resident annual comparison

Confirmed full-year residents enter independently prepared whole-dollar nonbusiness taxable balances and taxable-business bases after actual state deductions and excess exemption allocation. The enacted 2026 statute supplies zero nonbusiness tax through $26,050, then $332 plus 2.75% of the excess, and a separate 3% business calculation. Each annual estimate is rounded to cents before subtraction. FULL approved ordinary nonrefundable credits are entered separately for each scenario and capped at that scenario’s annual tax. Credit changes and negative differences are retained. Complete bases with blank credits resolve only before-credit annual amounts. Current state MAGI, exemption rights / allocation, credit eligibility and ordering are prepared inputs; refundable / recapture credits, local and other taxes require final prepared liabilities. The model does not apply the older rates printed in the 2026 estimated-payment sheet.

Hawaii resident capital-gain comparison

Use independently prepared Hawaii taxable income and capital worksheet line 10 in each annual scenario, with confirmed full-year residency and state filing status. State basis, netting, the N-158 investment-interest election, actual 2026 deductions / exemptions and Act 35 conformity are prepared inputs. The April 22 official correction supplies floors of $48,000 single / separate, $72,000 head and $96,000 joint / surviving. The model taxes the larger of ordinary taxable income or that floor using the continuing published table / schedule, applies 7.25% only to the eligible remaining amount, and selects the lesser of regular and alternative tax. It repeats this annual calculation before and after the sale and subtracts the selected amounts.

All 2,000 lookup rows are lower-inclusive / upper-exclusive below $100,000; literal schedules start at $100,000. Tax lines round to whole dollars. Future Act 24 brackets do not apply in 2026. This mode is before credits, other taxes and final 2026 return instructions; source allocation, restricted eligibility and changing credits require prepared final liabilities. Blank state amounts and unconfirmed scenarios preserve the federal subtotal and leave the combined amount unknown.

New York resident estimated-tax comparison

The New York mode follows the official 2026 IT-2105 instructions, pages 3–7 and 10. It requires confirmation of full-year residency, a state filing category, and independently prepared state taxable income and NYAGI for each scenario. The printed schedule dollar bases are used directly. NYAGI above $107,650 triggers the applicable benefit-recapture worksheet; phase-in fractions are rounded to four decimal places as instructed. NYAGI above $25 million uses the worksheet’s 10.9% calculation on the full entered taxable amount.

This is the resident state income-tax estimate before credits, local tax, other taxes and payments. Deductions, additions, subtractions and exemptions must already be reflected in the entered figures. Nonresident and part-year allocation, NYC and Yonkers tax, MCTMT, credit changes and special return effects need final-liability mode. An unconfirmed residency, blank amount or taxable amount greater than its NYAGI leaves the state result unknown. Official schedule dollar rounding can produce differences from summing unrounded marginal bands.

5. Interpret the result

The combined amount is the modeled federal change plus the resolved state change. Gain remaining after tax is not seller cash at closing and does not include debt payoff. A blank required federal input, unsupported category or inconsistent annual scenario leaves the calculation unresolved. A blank state input leaves the federal subtotal available and the combined amount unknown. Calculations retain cents for estimates; actual return rounding can differ.

Source review dates describe the research date. Prior-year forms retain their printed year, and future thresholds are not silently substituted. Review the state references before preparing a return.

How to fill each worksheet line

The worksheet on every state page asks for the same federal lines, then for the state lines that state actually needs. Hints beside each box are kept short; this section is the full explanation, written once.

Federal lines

• Federal filing status. Use the joint federal schedule for an eligible qualifying surviving spouse. Eligibility and state filing status must be approved independently; the state section has its own status choice where the state schedule depends on it.
• Ordinary taxable income, excluding this sale. Taxable income after deductions, held fixed in both scenarios. It is not gross wages or AGI, and it excludes the sale being tested.
• Other net long-term gains and qualified dividends. The prepared 0% / 15% / 20% category from everything except this sale. Other items are held fixed so the result isolates the sale.
• NIIT MAGI and net investment income. Enter both figures for the year without the sale and with it. Changing proceeds does not automatically update MAGI or net investment income; they are separate annual amounts.

State lines

• Entered final state liabilities. Each figure is the annual state tax after applicable credits. Include local taxes consistently if you include them at all. A blank stays unknown; enter zero only when it is confirmed.
• Prepared state taxable bases. State deductions and adjustments are already applied, and the comparison is before credits. The base is not the federal ordinary-income line.
• Resident annual estimates. Confirm full-year residency and the approved state deductions, netting and lawful credit eligibility first. The state filing status is the actual state return category; federal status never changes it automatically. Taxable income is the approved whole-dollar state balance after actual adjustments and deductions; federal income is not copied. Prepare the complete annual scenario again with the sale.
• Usable nonrefundable credits. Enter the full approved total that can be used in each scenario, recalculated after the sale. Exclude payments and withholding; they change what you owe at filing, not the tax.

Virginia’s distinct threshold and taxable-income measures

The actual 2026 resident estimated-tax instructions supply a continuing four-band schedule. The model first applies the statutory filing exemption to independently prepared VAGI plus the age deduction, then calculates each approved annual taxable-income schedule in cents. The approved Spouse Tax Adjustment is applied before each complete usable nonrefundable credit balance. Both scenarios must use the independently selected Virginia filing status. Unconfirmed residency, blank bases, missing threshold incomes or missing adjustments / credits keep the combined result unknown. Federal gain inputs never silently update the Virginia fields; final filing-table intervals, return rounding, refundable credits, other taxes and source allocation need prepared final liabilities.

District resident comparison

The DC mode applies the continuing statutory seven-band schedule to approved whole-dollar District taxable income without and with the sale, then caps the full usable nonrefundable credit total against each annual tax. Unknown credits preserve before-credit schedule figures but leave combined tax unresolved. Prescribed filing-table intervals, return rounding, refundable credits, other taxes and residency allocation require prepared final liabilities. District basis and deductions are independently approved; federal taxable income is not copied into those fields.

California’s indexed resident comparison

The California option uses the September 3 FTB 2026 indexing memo reproduced by CalTax, independently approved state filing status and whole-dollar California taxable income in both scenarios. Printed schedule bases are retained, each annual regular amount is rounded to cents, and the separate 1% tax on taxable income above $1 million is added after approved nonrefundable credits reduce regular tax. Its threshold never doubles for joint filers. Blank credits preserve visible before-credit amounts and keep final combined tax unknown. State basis, loss netting, conformity adjustments, deductions, exemption-credit phaseout and credit ordering remain independently prepared inputs. Prescribed filing tax-table intervals, final return rounding, AMT, refundable credits, other taxes and source allocation require prepared final liabilities.

Oregon published estimate and eligible farm category

The Oregon option uses the actual DOR 2026 OR-ESTIMATE Chart S or J for the independently approved state status. Its printed single third / top bases are $678 / $10,618, matching the current 2026 withholding publication. The February 3 legislative summary prints $679 / $10,619 instead. The model follows the agency estimate literally and discloses that discrepancy; it does not claim a correction, supersession or final-return equivalence. Whole-dollar annual schedule estimates are applied to the approved taxable balances after actual state adjustments, federal-tax subtraction, deductions and exemptions.

Confirm no eligible farm category or independently approve the net category described in current section 316.045 and the continuing 2025 OR-FCG worksheet. The farm portion is capped at entered taxable income, removed once from the ordinary schedule, and taxed at 5%. Ordinary and farm annual components round to whole dollars before their sum. Complete usable nonrefundable credits are separately approved and capped against the annual tax. Blank category approval or residency leaves the state components unknown; blank credits preserve the before-credit components and leave final combined tax unresolved. Qualified-business reduced rates, farm averaging, final filing-table intervals, refundable credits, local taxes and residency allocation require prepared final liabilities. Federal inputs do not auto-prepare an Oregon return.

Additional resident annual estimates

The remaining resident options use independently prepared state taxable balances, actual state filing status and complete legally usable nonrefundable credits. Connecticut instead starts with Connecticut AGI and computes its exemption, schedule, add-back, recapture and personal percentage credit. Its initial tax and personal credit round separately to whole dollars. Arkansas uses the revised May 6, 2026 estimate with transition bands and separate spouse columns; Missouri also calculates both combined-return spouse columns. Mississippi preserves signed spouse balances and nets them when only one is positive.

Maine adds the enacted 2% taxable-income surcharge and approved credit recapture before usable credits. Colorado requires approved AMT and credit recapture before its credits. Maryland separately requires federal AGI and complete covered annual gain for its strict $350,000 trigger and 2% surtax. Minnesota requires annual state-defined NII and legally permitted regular / NIIT credit allocations; other-state M1CR credits cannot offset NIIT. New Jersey independently tests annual gross-income thresholds before calculating its approved taxable-income schedule.

Vermont follows the explicitly preliminary 2026 schedule and compares it with the 3% eligible AGI minimum when unreduced federal AGI is strictly above $150,000. Montana caps prepared net long-term gain at taxable income and stacks it above ordinary income; its eligible 0% corporate-stock alternative needs final liabilities. A selected continuing whole-tax-box scenario rounds the separate ordinary and capital boxes before their sum. Idaho requires an independently approved actual 2026 indexed zero-tax floor; the published 2025 floor is not relabeled.

State capital deductions, SCIAD, conformity, basis, netting, exemptions and credit eligibility remain approved preparation inputs. A source labeled estimated or preliminary remains an estimate, and continuing 2025 form mechanics do not establish final 2026 filing-table equivalence. Each state guide names its distinct inputs, rates and exclusions. No state base is automatically populated from federal sale proceeds.