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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
December 18, 2012
On the first day of Christmas, my tax adviser said to me, "Read ‘C453: An Introduction’, to begin to acquaint you with how I’ll help you to defer and reduce your taxes in 2013." He added, "You’ll find it on the S.Crow Collateral Corp. Website as one of the ‘Publications’ listed there."
On the second day of Christmas and knowing my qualms about 2013’s taxes, my true love said to me, "Read ‘C453: An Overview’, to calm your qualms.
On the third day of Christmas, I approached my banker about financing for my small business. With a concerned look on his face and after a "hmmm" or two, he said to me, "I think it will help if you first read, ‘For C453 Sellers: An On-going Line of Credit, and Credit Enhancement’. If you do what’s described there, we may be able to help you."
On the fourth day of Christmas, and as I wondered whether tax deferral was really that important, my financial adviser said to me, "Read ‘C453 and the Economics of Tax Deferral’."
On the fifth day of Christmas, my business broker said to me, "Read ‘C453 for the Sale of a Business’ and ‘C453 for the Sale of Professional Practice’, to understand the concepts of a very attractive exit strategy for you, for 2013."
On the sixth day of Christmas, my biographer said to me—he assures me I’ll be famous someday—"Read ‘C453: A History', so that I can write that you fully checked it out."
On the seventh day of Christmas and although I may have to pay them to do so, I asked my lawyer and accountant to read, "Law of Installment Sales".
On the eighth day of Christmas and with that foundation, I asked them to read, "(C453 for) Attorneys, CPAs, & Other Advisers".
On the ninth day of Christmas my CPA told me that the other readings had intrigued him, so he had read, "C453 IRS Ruling", as well. "We’re making progress here," I thought, and I think he thought so, too.
On the tenth day of Christmas, a previous installment buyer from me told me that she plans to prepay our contract, in full, in 2013, more than ten years before it’s due. Hearing my complaint about the tax cost that I could incur, she said to me, "Read, 'Tax Deferral When Your Buyer Plans to Prepay'. It will be okay."
On the eleventh day of Christmas, I said to my nephew, who is facing foreclosure on a commercial property, "Read, ‘Tax Deferral When Foreclosure Looms’. At least the tax part of the problem can be resolved."
On the twelfth day of Christmas, I said to my true love, "Read aloud to me, ‘The Latest Installment’, but be gentle; there’s an ache in my heart that I may have nothing further to read until the next post."
An old expression said, "It’s the thought that counts," but what was really meant was not thought but kind intention. Here’s to both kind intention and carefully informed thinking in 2013.—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.