Idaho
Reviewed July 2026Federal §453 conformity
Yes — Idaho starts from the federal return and taxes installment gain as payments arrive at a flat 5.3% rate (HB 40, 2025). The centerpiece is the capital gains deduction: 60% of the gain from qualifying Idaho property — real property held at least a year, and certain tangible property used in an Idaho business — comes off before tax. The catch is what doesn't qualify: stock and entity interests. The same farm sold as land gets the deduction; sold as LLC units, it may not. Structure decides.
Nonresident sourcing
Gain from Idaho real estate or a business operating here is Idaho income for sellers anywhere — with the 60% deduction available on qualifying Idaho property regardless of the seller's residence. Intangible gain generally follows the seller home.
Withholding
Idaho imposes no closing-table withholding on nonresident real estate sellers. Pass-throughs handle nonresident owners through withholding or composite filings each recognition year unless the PTE election covers it.
Selling, then moving (residency change)
Idaho-source gain stays taxable here after a move; other gain travels with the seller, and no rule accelerates deferred gain at the border. Inbound movers from Washington's capital gains excise should note the two regimes tax on different bases — get year-of-move advice rather than assuming.
Pass-through entity (PTE) tax election
Idaho's 'affected business entity' election taxes the pass-through at the flat rate with owner credits, on annual terms. As in the other deduction states, confirm the entity-level computation's treatment of the 60% deduction before electing in a qualifying-sale year.
Estate and IRD
Idaho has no estate or inheritance tax, and it is a true community property state: both halves of a married couple's community assets step up in basis at the first death. For married sellers of appreciated Idaho land, the sequencing question — sale before or after that step-up — belongs at the front of the plan.
Planning notes
Idaho planning is structure triage: sell the qualifying asset — the land, the equipment — in a form the 60% deduction recognizes, because an equity sale of the same economics may get nothing; verify the year's flat rate; screen the PTE election against the deduction; and for married sellers, ask the community property sequencing question first.
Idaho's 60% capital gains deduction covers qualifying Idaho real and tangible property — not stock or entity interests. The same operation sold as assets qualifies; sold as LLC units or shares, it may not. Put the structure question ahead of the term sheet.
Educational information, current as of the July 2026 review. State law changes; confirm treatment with a qualified advisor before structuring a transaction.
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