Defer the Tax and Keep Your Cash
These public companies have successfully used the Monetized Installment Sale transaction structure to defer capital gains in amounts ranging from $24 million to $1.4 billion. The transactions, as reported to the SEC, occurred between 1999 and this year.
Deferral of capital gains tax is enabled under Sec. 453 of the Internal Revenue Code.
The overall structure of the Monetized Installment Sale has been judged acceptable by the Office of Chief Counsel of the IRS in Memorandum 2012340F released August 24, 2012.
A Monetized Installment Sale
is a way to structure the sale of an asset
with a low cost basis relative to its sales price.
You can walk away from the closing with cash in hand, and
up to 30 years to pay the capital gains tax due on sale.
It's your choice:
Pay the tax today in present dollars,
Pay the present value of the future tax 30 years from now.
DEFER THE TAX AND KEEP THE CASH
Sale of Veterinary Practice
Veterinarian sells his practice for $2,450,000, a gain of roughly $1.4 million, which would have cost him about $500,000 in capital gains tax. 100% of gain was deferred. He nets $2.29 million in cash at closing.
Real Estate Investors Exit the Market
Elderly couple sought relief from maintenance and management of their $25 million in apartment building assets. Deferred $12 million in capital gain, netting $2.8 million more than if they had sold for cash and paid the tax.
Winery Owner Liquidates
Retired executive turned around a struggling winery and harvested his results several years later, deferring $3.4 million in capital gains and netting $4.6 million he used to seed his next venture.
Rescue of a Failing 1031 Exchange
Professional real estate investor underestimated the time to find a replacement property in a 1031 exchange. Bailed out before the deadline by converting to a Monetized Installment Sale, avoiding a disastrous capital gain and obtaining cash she used to shop for another property at her leisure.
Find out how much a
Monetized Installment Sale
can save you
71 Stevenson St, Ste 400
San Francisco, CA 94105