Combined rate and how to defer it in South Dakota.
South Dakota levies no state income tax, so investment property sellers owe only the federal rate: up to 23.8% (20% federal + 3.8% NIIT, 0% state). South Dakota's tax environment is one of the primary reasons the state is a popular choice for trusts and holding entities.
South Dakota has no state income tax. Capital gains on investment property are taxed at the federal level only. Estimate the federal bill including depreciation recapture with the capital gains tax calculator.
A 1031 like-kind exchange defers the full 23.8% federal rate by reinvesting all proceeds into a replacement property. Model it in the 1031 exchange calculator and check your deadlines with the timeline calculator.