It depends on structure, price allocation, basis, and state. For 2026, long-term federal capital gains top out at 20 percent, North Carolina applies a flat 3.99 percent individual rate, and South Carolina tops out at 5.21 percent while letting individuals deduct 44 percent of net capital gain.
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The variables are whether the deal is an asset or a stock sale, how the price is spread across asset classes, your basis in the entity and the assets, the entity type, and which state taxes the gain. At the federal level the IRS caps most long-term capital gain at 20 percent and unrecaptured gain on depreciated real property at 25 percent, while depreciation recapture on equipment is ordinary income reported in the year of sale even if the price is paid over time. The 3.8 percent net investment income tax generally does not reach gain on property used in a business you actively run, which is worth confirming for your facts. North Carolina has no separate capital gains schedule, so its 3.99 percent rate applies to the whole gain, and its 2.00 percent corporate rate for 2026 adds a second layer when a C corporation sells assets and then distributes the cash. South Carolina rebuilt its brackets in Act 110 of 2026 and kept the 44 percent deduction in S.C. Code 12-6-1150, so qualifying long-term gain there carries an effective top state rate near 2.9 percent. In an asset sale both sides file IRS Form 8594 allocating the price across seven asset classes, and that allocation sets how much of the gain is capital and how much is ordinary, which is why it gets negotiated. The asset versus stock comparison shows how structure shifts the mix, and owners who live on one side of the state line and operate on the other should read the two-state question. Bring in a transaction-experienced CPA during preparation and model two or three structures before a letter of intent; the modeling for your sale belongs with that CPA.