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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
July 23, 2013
"Caught in our gold-plated chains are we,
Lost in our wealthy domains are we.
Trapped by our capital gains are we,
But we’ll keep romance alive."
—From "How Can Love Survive" in "The Sound of Music", lyrics by Oscar Hammerstein
"In all the famous love affairs the lovers have to struggle," as the song says, but for the wealthy, who are "up to your necks in security, how can love survive?"
The struggling lovers who are "warmed by the glow of insolvency" can take some comfort from the fact that at least they don’t have a tax problem.
It’s not so easy for those affluent people who are trapped by their capital gains; they are stuck with their "wealthy domains" because of the tax cost that would be incurred if they were to sell. That surely can’t be good for romance.
Whether selling their wealthy domains would actually improve their love life I couldn’t possibly say. Just in case it would, though, those who are locked into keeping their domains need to know that they can greatly reduce the tax cost of selling—if they sell with a collateralized installment sale or "C453" transaction.
Free yourself from your gold-plated chains. Sell your wealthy domains without a heavy tax cost. It just might help to keep your romance alive.—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.