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176. Does an Installment Sale Defer the Tax on Recapture of Accelerated Depreciation? No. Can the Tax on Recapture of Accelerated Depreciation Nevertheless Be Deferred When an Installment Sale Occurs? Yes.
162. Transfer a Family Business to the Next Generation During the Parent's Lifetime, Retain an Asset for Income, Give the Transferee a Stepped-up Basis, Defer the Gain on Sale, Support the Parent with Deductible Rent, and Finance the Transaction, Too
August 9, 2012
Regular readers of The Latest Installment are well aware that S.Crow Collateral Corp. buys capital assets in such a way that our sellers may use installment reporting under Section 453 of the Internal Revenue Code to defer the tax on the gain.
Well, here’s something else that’s new: a lender which is willing to lend the tax money (or more) to sellers of capital assets, and to do so in a way which achieves the equivalent of tax deferral. This lender is Marigold Credit Company, which is located in Boise as we are, and which may be found at www.MarigoldCredit.com.
Marigold Credit Company now issues advance, contingent loan commitments to prospective sellers of capital assets (commercial property, residences, mineral rights, professional practices, art collections, and so on) to lend to them an amount of money that will equal or exceed the tax cost of selling the asset. Marigold’s loan commitment can function as a contingent line of credit on which the seller may draw from time to time as capital assets are sold.
The loan term can be for as long as 30 years.
If the seller enters into an installment-sale contract with S.Crow Collateral Corp., the seller’s repayment of the loan from Marigold Credit Company can be funded by S.Crow Collateral Corp.’s payments to the seller.
As Marigold’s Website says, "(S)ometimes the best solution to a problem is the simplest and most direct one, and sometimes it’s been there all along, just waiting for us to see it."
You’ll see it, too, as Marigold has, if you visit their Website.—Stan Crow
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The Latest Installment addresses situations, questions and issues which are brought to us in the course of the consideration, negotiation or execution of transactions. We don't use the real names of parties to transactions, and we may edit the statement of the question to try to tell the story better. Please feel free to comment, or to take issue, or to raise your own question or situation. If you do the latter, please do not relate any confidential information.
The Latest Installment blog is edited by Stanley D. Crow, who is president of S.Crow Collateral Corp.