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Many people say, “I want to sell my business (or
properties) and retire”. Now there is a way to sell a business (or a
piece of real estate), defer the capital gain and get a secure stream of
payments to use for retirement or for any other purpose.
This is called an installment sale that been used for years. Now there
is a new way for future tax-deferred payments to the seller to be funded
with an annuity from a large, highly rated life insurance company. Also
a large life company will assure the future payments, not just the
buyer.
The benefits are that taxable gains are deferred, a large life
insurance company will guarantee the obligor, the seller gets a
guaranteed rate of return, investment risks are minimized, and there is
long term financial security.
For business owners there are several specific advantages. The main one
is that it allows them to sell the business and not have to just depend
on the buyer for future buyout payments. Sometimes a business owner may
sell a well-established company to a good prospect, only to see it fail
in just a few years after the sale. Because future payments to the
seller depended on the company surviving, the prior owner now has to
come out of retirement, take over the firm, rebuild it and resell it.
With an installment sale with an annuity company assuring the future
payments, this risk is eliminated.
Another advantage is the ability to defer capital gains. Many business
sellers started their firms many years ago with very little capital.
This means that the sales price reflects a huge capital gain tax
problem. With an installment sale, this capital gain may be deferred
into the future saving the seller enormous amounts of money.
The bottom line is many folks want secure, tax-deferred, future cash
payments when they sell their business. An installment sale with an
annuity will achieve these goals. Please call today to help you do this.
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