Structured Installment Sales

You can now sell your property or business, defer the capital gain and get a stream of payments for retirement or for any other purpose.

This is an installment sale under Internal Revenue Code Section 453, that has been used for years. Now, a new added element to this installment sale transaction allows the seller to receive the future payments from a large, highly regulated trust company. This is called a Structured Installment Sale.

A Structured Installment Sale allows sellers to avoid recent large tax increases, i.e. 15% to 20% for Federal capital gain taxes, 9.3% up to 13.3% for California capital gain taxes, and 3.8% for the Affordable Care Act. It puts in place a large secure trust company to make the future payments, gives a guaranteed rate of return, minimizes investment risks, and provides long-term financial security.

Deferring capital gains is a huge advantage when using a Structured Installment Sale. Many business sellers started their firms many years ago with very little capital and now the business is worth many times that amount. Many property owners similarly purchased a piece of real estate for a relatively low amount say $100,000 and it now may be worth over a million dollars. Many business and real estate owners have enormous capital gain tax liabilities. With a Structured Installment Sale, this capital gain may be deferred into the future saving sellers enormous amounts of money.

For real estate owners there are other several specific advantages. It allows owners to sell their property – a primary residence, residential rental, or commercial - and transform that equity into a secure cash flow. Owners don't have to buy another property to defer the capital gains and it relieves them of property management duties. Also, instead of living in or maintaining current properties that no longer meet their needs, owners can now move to a property that suits their lifestyle and which is located where they prefer to live.

A Structured Installment Sale allows business owners to sell the business and retire, move onto another business venture, and be assured that a large financial institution will provide the 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. In a Structured Installment Sale, the future payments to the seller no longer depend on the sold business, and the seller does not have to come out of retirement, take over the firm, rebuild it and resell it. This risk is eliminated with a Structured Installment Sale.

Many folks want to avoid paying high taxes and obtain guaranteed future payments when selling real estate or a business. Many owners also do not to buy another piece of real estate or another business. A Structured installment Sale will achieve these goals and more. Please call today to let us show you how to achieve this.