Capital gains tax in Alaska (2026): selling a business, real estate or farm

No individual income tax, so the federal bill is the whole bill

The Alaska Department of Revenue says it directly: the state does not currently have an individual income tax, so no state withholding is required. The individual tax was repealed in 1980 (AS 43.20.011, per the state's accounting manual). There is no state return to file for an individual's gain, no state capital gains schedule and no state withholding when escrow closes on Alaska land.

That leaves federal tax: 0%, 15% or 20% on long-term gain for 2026 under Rev. Proc. 2025-32, 25% on unrecaptured Section 1250 gain, and the 3.8% NIIT for passive owners and investors. The federal capital gains guide explains each layer, and NIIT on a sale covers who escapes the 3.8%.

Worked example: Alaska against California

A joint-filing couple with $160,000 of other income sells company stock for a $3,000,000 gain in 2026. As Alaska residents they owe $0 to the state and $710,345 in total, an effective 23.7%. The same couple living in California would owe $363,739 to California, $1,074,084 in total: $363,739 more for the same sale.

For real estate the pattern holds as long as the property is in Alaska: an Anchorage rental with a $2,000,000 gain costs $516,133, all federal. The engine leaves out local property and sales taxes, which Alaska boroughs and cities set on their own.

The exception: C corporations pay Alaska tax on a sale

Alaska still taxes corporations. Its corporate income tax starts from federal taxable income, and rates are graduated from 0% to 9.4%, with 9.4% applying to taxable income of $222,000 and over (Alaska DOR corporate income tax overview, 2026). When a C corporation sells its assets, the gain lands inside the corporation and is taxed there before any money reaches the owners, who then face federal tax on the liquidating distribution.

That makes the choice between an asset sale and a stock sale more expensive in Alaska than the no-tax label suggests. A buyer usually wants assets for the basis step-up; a C corporation seller usually wants to sell stock and avoid the corporate layer. See the C corporation double tax and asset sale vs stock sale. Partnerships and LLCs taxed as partnerships with any partner that is not a natural person must also file an Alaska partnership return (Alaska DOR).

Moving to Alaska before a sale

Alaska's lack of a tax does not erase your former state's claim. Under California's rules, for example, California real estate stays California-source after you move, and stock sold on installment while you were a California resident stays taxable to California as payments arrive (FTB Publication 1100). Other states have similar rules for real property and accrued gains. A move helps most for stock or partnership interests sold after domicile has clearly changed; the residency change analysis walks through the evidence auditors look for, and each state's page, such as California, covers its own reach.

Opt-in community property and the basis question

Alaska is not a traditional community property state, but the Alaska Community Property Act (AS 34.77) lets married couples opt in through a community property agreement or a community property trust. The appeal for a seller holding appreciated property is IRC 1014(b)(6), which gives both halves of community property a new basis at the first spouse's death. The IRS has not said how it treats this elective form: Publication 555 expressly does not address the federal treatment of community property elected under Alaska law. Treat the double step-up as a position to review with your own counsel, not a settled result, and weigh it against selling now in holding for the step-up.

Estate tax, seller financing and deferral in a no-tax state

Alaska no longer has an estate tax; it ended January 1, 2005 when the federal credit it was tied to phased out (Alaska DOR). The federal estate tax still applies to large estates. With no state tax to defer, an installment sale or 1031 exchange in Alaska is purely about federal brackets, NIIT and timing, which often makes the math simpler. Compare all states on the capital gains tax by state table and the states with no capital gains tax list. To model the federal side of your own sale, get the Big Sale Tax Analysis.

Run your own numbers

Frequently asked questions