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205. Why Congress Provided for Monetized Installment Sales

204. Here's How to Do a Financial Analysis of the Probability-weighted Benefit and Tax Risk with M453

203. If a Seller Uses a Monetized Installment Sale (M453), Can the Resale Be an Installment Sale, Too?

202. Solve the Double-Tax Problem for Earnings of C Corporations with a Long-Term Installment Sale Coupled with a Monetization Loan

201. When You Can, and When You Can’t, Change a Deal after the Fact, for Better Tax Treatment

199. Are We Really Able to Hear Each Other? Or Are We Locked in by What We're Sure We Know?

198. C453 is Presented in Meeting of Professionals, Principals and Advisors Connecticut

197. An Insured Can Defer the Tax on Sale of a Life Insurance Policy, But Partly on One Ground, and Partly on Another.

196. Liquidate a “C” Corporation with Minimal Tax Cost, with C453

195. Here’s a Strategy for Your Benefit if Your LLC Partners Don’t Need Tax Deferral when Your LLC Sells

194. With C453, Help Yourself and Your Favorite College, University or Other Charity, Too

193. The Doctor, the Tardis, Time Travel and Taxes

192. Find Out Whether a 1031 Exchange or a C453 with a Monetization Loan is the Better Choice for You

191. U.S. Bankruptcy Court Approves C453 for Sale of High-Value, Low-Basis Asset

190. With Higher Tax Rates, Our Business Enjoys a Substantial Uptick, Both Overall and in Deal Size

189. Can C453 Be Used for Sale of a Business to an ESOP?

188. "Who Gots It Don't Want It": 1099-MISC Income and Schedule D Income

187. Defer Tax on Commission Income, and Increase Your Disposable Cash Flow

186. IRS Chief Counsel Blesses Tax Deferral through an Installment Sale Coupled with a Monetizing Loan

185. Can a Residential-subdivision Developer Obtain Capital-Gain Treatment on Lot Sales? And Defer the Tax, Too?

184. A 1031 Exchange Scandal: Who Cares about the Taxpayer?

183. Can C453 Repeatedly Achieve Tax Deferral for the Same Money, As in Hopscotch?

182. Business-Normal Practice to Know Your Counterparty: Coherence, Reasonableness, Verifiability and Understandability

181. Keep Your Romance Alive, with Some Help from C453

180. C453 Can Avoid a Tax Hit on Disposition of Assets on Divorce, and Simplify Division as Well

179. Liquidate U.S. Investments and Invest the Gross Proceeds Internationally, without Having to Pay U.S. Taxes First

178. Sell Capital Assets without Current Tax Cost; Make Tax-deductible Gifts to Charity; Reduce Tax as Well as Defer; and Substantially Increase Cash Available for Other Uses

177. An Occasion for Sadness: When Advisers Let 1031 Exchanges Fail, or Cause Them to Fail

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.

175. Should You Choose a 1031 Exchange, or a Collateralized Installment Sale?

174. When to Use a Collateralized Installment Sale (C453) with, or in Place of, a Charitable Remainder Trust (CRT)

173. Hear about Collateralized Installment Sales on Smart Money Talk Radio Nationally on Monday, January 28

170. Will the New 3.8% Investment Tax and the Higher Capital-Gains Tax Actually Increase the Government's Revenues?

168. The New 3.8% Medicare Tax Can Be Deferred in Installment Sale Transactions.

167. Four CPE Credits for CPAs, January 15

166. Twelve Days of Christmas Tax Readings

165. How an Installment Sale Reduces Estate-Tax Liability

164. With Tax Deferral, You Needn't Rush to Sell Before the Tax Increase on January 1

163. Not in Good Health, a Taxpayer Finds a Solution to the Dramatic Increase in the Estate Tax Coming on January 1.

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

161. Use C453 to Eliminate Estate Tax and, with Life Insurance, to Transfer Assets and Cash to the Next Generation

160. The Price of Economic Uncertainty: 1% to 2% Higher Unemployment

159. A New Reason Why S.Crow Collateral Corp. Isn't Just Another Intermediary: Standing Advance Loan Commitments and Credit Enhancement for Our Sellers and Potential Sellers

158. How Markets Differ from Gambling and Pyramid Schemes

157. Here's a New Way to Achieve the Equivalent of Tax Deferral.

156. Don't Fence Me In: When Government Makes an Entrepreneur Feel Claustrophobic

155. Action Now Can Help You Cope with the "Tax Cliff" at the End of This Year.

154. A Case Study: Deferring the Debt-Over-Basis Tax (and Tax on Other Gain) when Encumbered Property Is Sold

153. Would You Like to Move to a Low-Tax State, without Paying an Exit Tax?

152. Here's a Better Solution for the Tax System and the Economy: A Graduated Retail Sales and Services Tax

151. Thinking Dangerously: When Docile Taxpayers and Their Advisers Give Away Legal Rights

150. For Doctors Who Sell Their Practices to Hospitals: Watch for Hidden Risks, Costs and Traps

149. An IRS Ruling and Collateralized Installment Sales

148. New Scientific Research Looks at How the Human Brain Deals with Taxes

147. The "Jevons Paradox", "Sustainability", Gasoline Prices, and Opting for Growth Rather than Decline

146. Why Our Sellers Want to Say to Us, "Please, please, don't pay, or at least don't pay now!"

145. How Does a Collateralized Installment Differ from a Deferred Sales Trust?

144. The IRS Has Issued Detailed Guidance on "Economic Substance". Let's Learn It and Use It.

143. Why Lenders Like to Lend to Those Who Sell to S.Crow Collateral Corp.

142. About Tax Advisers Who Think Installment Sales Equal Cash Sales. Sure, and I-95 Equals I-90.

141. Let's End the Confusion about the Tax Treatment of "Real" Transactions.

140. New Information, New Understanding and New Tools, Available Now, Avoid Regrets Later

139. Does Your Tax Adviser Read the Law, or Merely Read or Hear What Others Say the Law Is?

138. Avoid Tax at the Entity Level on Sale of a Business, Regardless of the Legal Form of the Entity

137. When Your Company Moves up in the Marketplace, the "Lake Erie" Criteria Help the Shareholders Select the Company's Board Members.

136. What Can Be Done for Tenant-in-Common Investors in Commercial Property Facing Foreclosure?

135. Can the Tax on Depreciation Recapture on the Sale of Equipment Be Avoided or Deferred?

134. Say It Isn't So: Political Risk Is Affecting American Business and Americans' Freedoms

133. No Dollar Limit Applies to Tax Deferral on Installment Sales of Agricultural Properties or Rights

132. How a Business Owner's Creative Thinking Led This Week to a Solution for Sale of His Business

131. CPI Rises to 3.9%, and Treasury Sees the Heaviest Bidding in 13 Years for TIPS; Maybe There's a Connection?

130. Today's Producer Price Index Report: Inflation Hits 0.8% in September (a 10% Annualized Rate)

129. For a Better Understanding of the Tax Code, Try Looking First at the Forest, Before Looking at Each Tree

128. Will the Now-Fainting 1031 Tax-Deferred Exchange Industry Ever Come Back?

127. The Flavor of the Week, Based on Customer Requests, Is the Looming Tax Cost of Commercial-Property Foreclosure.

126. Try to Be Calm about This News, But the Tax Problem on the Sale of a Business Is Solved.

125. The Federal Reserve Succeeds in Its Fight Against Deflation--But Inflation Rises.

124. Alert! Defer the Tax on Your Sales Commission Income, with DEFCOMM.

123. So, How Is That Advice That You Gave in 2007 Working Out?

122. Today's Market Rout, and When You Have Assets Which You Could Sell, But Not at a Price Anyone Is Willing to Pay

121. Selling Property at Auction Can Trigger Tax, Even if You Don't Net Any Cash--unless You Combine the Auction with a Collateralized Installment Sale.

120. Just the Facts, Ma'am: How to Minimize Tax-audit Fear.

119. How Can One Shelter Interest Income from Tax? Or Convert It to Capital Gain?

118. Follow These Practical Guidelines to Preserve Tax Deferral for Your Installment Sale, If You Borrow Money at the Same Time

117. The Government Has Painted Itself into a Corner Because of Debt, and Can Do Very Little to Help the Economy. The Private Sector Has Some Options Left, However.

116. Did You Hear about the 3.6% Tax Increase Just Now Quietly Announced? Or about the Further Tax Increase Coming Next Month?

115. How an Average Person Can Tell Effective Economic Stimulus from Ineffective Stimulus

114. Here's the Silliest Argument Yet, in Favor of Raising Taxes--and It Was Made With a Straight Face.

113. So, You Have a Property That's about to be Foreclosed. How Can You Save Your Credit, and How Can You Avoid Tax on the Excess Debt?

112. A Nationally Prominent CPA Joins in Conversation about Tax Deferral and Collateralized Installment Sales

111. Are There Hidden Costs Associated with a Collateralized Installment Sale? With Other Tax-Deferral Methods? What Is the Real Cost?

110. Will an Investment Adviser Prefer That a Client Sell in a Collateralized Installment Sale ("C453"), or in Some Other Way?

109. Will a Real Estate Broker Make More Money, or Less, with a Collateralized Installment Sale?

108. The "Economic Substance" Doctrine Is a Safe Harbor for the Tax Treatment of Your Transactions, So Use It.

107. Professionals Who Wing It, and Give Distorted Tax Advice

106. You Can Easily Avoid Tax on Relief of Debt. Here's How.

105. Set Sail Now--and Get Set to Sell Now--with Our Flagship

104. How Do You Feel--or What Do You Think--about the Whole Idea of Tax Deferral? Is It a Wholesome Activity?

103. A Done Deal: Seller Sells a Capital Asset and Defers Tax for 30 Years, But Has Equivalent Cash. How Can This Be?

102. "Wave of Frantic Consolidation in the Health Industry" Calls for Tax, Estate and Investment Planning, Now

101. Plan for Long-term Care, While Preserving Your Wealth with a Collateralized Installment Sale

100. How Do Pigeons, Innovation and Freedom of Contract Relate to One Another?

99. The Golden Egg: Create Your Own Investment Fund with MoneyThat Otherwise Would Be Required for Taxes

98. Subtle Deconstructionism Affects Legal and Tax Advisers, and You, Your Pocketbook and Your Freedoms

97. #2 in a Series: Announcement: You Participate in Loan Fees, And Everyone Benefits

94. #1 in a Series: Announcing: Tax Deferral with Complete Liquidity

93. Thank Heaven for Little URLs: One That Circumvents Tax-Deferred Exchange Problems

92. How Can the Seller Sell at 2007 Prices, While the Buyer Buys at 2010/11 Prices?

91. Buying a Property? Want to Reduce the Tax on the Lease Income after You Buy?

90. A Key to Growing Your Business: Use Your Knowledge of Yourself (Your Theme) As a Lens to See Opportunity

89. Better than an IRA: Pre-tax Money Buys "Underwater" Homes at Market or Less and Produces Income Not Taxable to You. Then You Finish by Deferring the Tax on Resale.

88. A Conversation about Saving a Particular "Underwater" Home Loan

87. Put Your Defense in Place Now, against the Estate Tax Beginning January 1

86. At Last: A Private-Sector Solution Shows up, for Underwater Home Mortgages

85. Are We There Yet? --Not Now, Not Later, if "There" Means Paying the Capital Gains Tax

84. A New Philosophy of Tax Benefits: How to Obtain Happiness and Tax Benefits, Too

82. Minimizing the Tax on Marcellus Shale Mineral Rights Income

81. "That's the way it's always been done."--How Government and Business Really View Innovation

80. Selling into a Down Market: Why Sellers and Buyers Should Stop the Waiting

79. "If only I'd Known Then What I Know Now": Q&A about Commercial Loan Portfolios, While There's Still Time.

77. Defer the Tax on the Sale of Your Business, and Pay the Tax Later in Cheaper Dollars

75. S.Crow Collateral Corp. in Business Week

76. How Can Your Bank Profitably Reduce Its Exposure to Commercial Real Estate?

74. Avoid the Power Trip: Don't Get Above Yourself

73. Two Moves Ahead: Playing Dynamically to Win in Today's Economy

72. Take a Number, for Bank-owned Commercial Properties: How the Bank Can Sell High, and You Can Buy Low

71. Reading the Warning Signs: Is Is Worth Trying to Do Business with a Narcissist?

70. On Being #1: A Largely Unobserved Incoherence about Innovation and Leadership, in American Business

69. Part 5: Is It a Gimmick, or Is It Worthy of My Time to Hear? It's *Not* Whom You Know

68. Part 4: Is It a Gimmick, or Is It Worthy of My Time to Hear? About Loopholes vs. Substance

67. Part 3: Is It a Gimmick, or Is It Worthy of My Time to Hear? About Black Swans, and Surprises

66. Part 2: Is It a Gimmick, or Is It Worthy of My Time to Hear? How Excited Is the Proponent?

65. Part 1: Is It a Gimmick, or Is It Worthy of My Time to Hear? The Role of a Stated Economics Rationale

64. In a Short Sale of Your Commercial Property, Why Not Pay Your Loan in Full?

63. We Can't Cause Market Values to Rise, But We Can Increase Your Equity Immediately

62. Let's Opt Out of a Decade of Stagnation in Commercial Real Estate Prices

61. It's a Roller Coaster around Here, As We Work with Those Who Are at the Top, and Those Who Were at the Top

60. A Rescue for TIC Investors in Troubled Properties or Who Just Want Out without Being Taxed to Get Out

59. The Ever-Present Logical "Fallacy of Division" in Public Discourse Makes a Dumb Argument Sound Good

58. I Sang for My Father: For Optimism in Opportunity

57. Red Flag #2 about DSTs: Invitation to a Conflict of Interest

56. About Clamor at Parties, to Learn about Tax Deferral or Resolving Troubled Commercial Loans

55. How Does a Collateralized Installment Sale Differ from a Sale to What Is Called a Deferred Sales Trust?

54. 1. Dealburt Retires. 2. "Regulatory-Risk" Aversion Will Reduce Economic Growth.

53. Ready for Prime Time: Our Criteria for Resolving Troubled Commercial Loans

52. What's the Easiest Way to Minimize Your Risk of Investment Loss? Postpone the Tax on the Previous Investment.

51. One Size Fits One: Because Every Situation Is Unique, Every Transaction Should Be Unique, Not a Formula

50. The Creative Process, Categorical Reasoning, and Tax Minimization

48. New: A Perpetual Collateralized Installment Sale: Permanent Tax Deferral in Unlimited Amounts

The Latest Installment

#205: Why Congress Provided for Monetized Installment Sales

December 10, 2015

 Those of us who are old enough to remember what was happening in 1980 can recall all too well the state of the economy then:  high inflation, high interest rates, and high unemployment.  We remember the “misery index” which was created by economist Arthur Okun:  the sum of the inflation rate and the unemployment rate.

It was the high interest rates, though, that did the most to bring institutional lending for the buying and selling of real estate and other capital assets nearly to a halt—and Congress heard from the people about it.

Part of Congress’ response was the 1980 codification of what came to be termed the monetized installment sale provisions in the tax code.  Congress saw installment sales as a potentially substantial contribution to economic recovery, because a particular seller who could “carry the paper” on a sale and a particular buyer who needed financing to be able to buy could agree on any interest rate they might choose, regardless what market interest rates were at banks and other financial institutions.

So, to encourage sellers to be willing to carry the paper so that someone could afford to buy, Congress added provisions which allow sellers to sell on installment contracts but receive borrowed money in hand at the same time, without losing the tax deferral that typically accompanies an installment sale.  Under these new provisions, sellers could defer the tax on the sale but have liquidity at the same time.

The rules which Congress put into place allow sellers of agricultural properties and homes to sell on installment contracts and at the same time borrow money, with the loan being secured by the installment contract.  In the case of installment sales of business or investment property, Congress said that the installment seller could enjoy tax deferral and still borrow...

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#204: Here's How to Do a Financial Analysis of the Probability-weighted Benefit and Tax Risk with M453

July 16, 2015

 I am a persuaded advocate of Monetized Installment Sales (M453) transactions, and I believe that the legal and factual reasons and precedents in support of them are far, far stronger than whatever arguments one could make against them.  Let’s put all of that aside for now, though, and consider how one may develop a financial analysis of the prospects for and against M453.

How can a seller or a seller’s adviser put a number on the risk of a tax audit and of a possible decision adverse to tax deferral with M453?  How can a seller intelligently financially calculate whether the risk is worth taking?

Calculating the Probability-weighted 30-year Benefit

1.     Estimate the probability, expressed as a percentage, that the M453 will continue as planned for 30 years.  90%?  75%?  50%?  25%?

2.     Project the amount of after-tax return over that 30-year period, on the net proceeds of the monetization loan.

3.     Multiply #1 by #2.

4.     Add the net proceeds of the monetization loan, because the seller will retain this amount.

5.     Subtract the net sale proceeds, because the seller will not receive this amount.  (The seller will receive this amount at the end of 30 years, but then the money will go to repay the monetization loan.)

6.     Subtract the estimated eventual tax cost on the sale, and the resulting figure is the projected benefit if the M453 is undertaken and proceeds as planned.

Calculate the Probability-weighted Cost of an Adverse Tax Decision

7.     Estimate the probability, expressed as a percentage, that the seller will undergo a tax audit and that the M453 transaction will be challenged in that audit.

8.     Estimate the probability, expressed as a percentage, that the outcome of the tax audit will be...

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#203: If a Seller Uses a Monetized Installment Sale (M453), Can the Resale Be an Installment Sale, Too?

May 21, 2015

(Please note:  On this Website the reader will see countless references to “collateralized installment sale” transactions, and to “C453”, for short.  Because the IRS has used the term, “monetized installment sale”, we’re changing our terminology accordingly, without any change in the content of the deal.  So, wherever on this Website you see the phrase, “collateralized installment sale”, think “Monetized Installment Sale” instead, and wherever you see “C453”, think “M453” instead.  Regardless of the name change, the structure of the deal remains as it has been since 2011.)

I’ve frequently been asked whether the ultimate purchaser can purchase on an installment contract from S.Crow Collateral Corp., when S.Crow Collateral Corp. purchases from a seller in a tax-deferred Monetized Installment Sale (M453) transaction.  My answers have not always appeared to be consistent, and I’ll try to clear up that seeming inconsistency now, with this post.

First, the rationale:  For the lender to be willing to fund the monetization loan to the seller, the lender requires assurance that S.Crow Collateral Corp. has deployed the resale proceeds in such a way that the lender can...

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#202: Solve the Double-Tax Problem for Earnings of C Corporations with a Long-Term Installment Sale Coupled with a Monetization Loan

March 25, 2015

For owners of C corporations a major hurdle to overcome is the double-tax problem for corporate earnings:  the tax on the income at the company level, and the tax at the shareholder level when the money is taken out.

At the top federal corporate tax rate of 35% and a rather average 6.75% assumed for the corporation’s state income-tax return, the total corporate rate on additional income would be 41.75%.  If the money is paid out to upper-income shareholders as a qualified dividend, it will be taxed again for federal income-tax purposes at 23.8%, including the net investment income tax.  If the state’s tax on personal income is 6.75%, then the total tax cost could be an awful 72.3%.

Now, let’s suppose that the corporation has a valuable capital asset which it wishes to sell and for which there is a ready, willing and able buyer, at a price of $5 million.  Let’s assume further than the corporation’s basis in that asset is zero.  If the asset were to be sold for cash, the tax cost of taking that $5 million out of the company could be $3,615,000 (at the 72.3% overall rate).

If instead the asset is sold by the corporation on a no-money-down, non-amortizing installment contract for $5 million due in 30 years with monthly interest throughout those 30 years, the up-front tax cost on the sale would be zero.  In the meantime the company would have the non-taxable proceeds of a monetization loan in an amount nearly equal to the $5 million.

So, when the installment contract is paid in full at the end of 30 years and if the same tax rates apply then, the tax cost then would be the same as now, in numbers of dollars:  $3,615,000, just as now—except that the tax will be paid in depreciated dollars because of inflation over the 30 years.  If we have a 3% inflation rate for that 30-year period, the dollar will be worth 41 cents then compared with today, so the $3,615,000 will be worth only $1,482,150...

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#201: When You Can, and When You Can’t, Change a Deal after the Fact, for Better Tax Treatment

January 21, 2015

Without my trying here to delineate all of the boundaries, let’s get one example of “when you can’t” out of the way right now.  What you better not try to do is to back date something so that you can pretend that you did it then rather than now.  The pretense is cheating.  Don’t do it.

On the other hand, for an example of “when you can”, suppose that you entered into a transaction on, say, January 1, 2013, and now either you or the other party (let’s call her Jill) wishes, or both of you wish, that it had been done differently.  You may wish that items A, B and C had been done differently, and Jill may wish that items D, E and F had been done differently.  Jill and you talk it over, the two of you find some room to agree on some changes, and the two of you discuss what the effective date for the changes should be.  Both Jill and you decide that it would be better for both of you if the effective date of the changes would be the beginning date—January 1, 2013—rather than now, two years later.

So, Jill and you sign a new agreement, you date it now, and you say in it that the changes you’re making will be effective from the beginning (more than two years ago) rather than now and rather than some date in the future.  To the extent that requires one of you to pay money, transfer an asset, or provide other performance, that is done now.

If this requires that the...

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#199: Are We Really Able to Hear Each Other? Or Are We Locked in by What We're Sure We Know?

January 08, 2015

       All right, it’s time that we talked this matter out:  a real heart-to-heart conversation in which each of us hears—really hears—what the other is saying.

      As I understand it, what you’re saying to me is that you are the attorney for the owner of a $100 million commercial building.  The owner has a tax basis of $20 million.  He wants to sell, and he doesn’t want to do a 1031 tax-deferred exchange; he’s done lots of those already, and now he wants an exit strategy—not just another trade, not just another property to manage, but a real exit without having to pay the capital gains tax now.

      When I say to you that your client should consider an installment sale coupled with a monetization loan (as the Internal Revenue Service calls it) as a tax-deferred exit strategy, you sort of blow me off.  (Pardon me for putting it so bluntly.)  You say that of course a $100 million installment sale won’t do the trick, because of the requirement in Internal Revenue Code Section 453A that the seller pay interest to the IRS on the deferred tax if the installment sale price exceeds $5 million per owner (unless it’s agricultural or personal-use property).

      I reply:  Here’s where it gets really interesting, but it’s also where it gets really difficult and requires some patience to hear me out.  What I’m saying is...

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#198: C453 is Presented in Meeting of Professionals, Principals and Advisors Connecticut

October 29, 2014

 Graydon Garner, Certified Financial Planner in Stamford, Connecticut, hosted a meeting of about twenty professionals, principals and advisors at the Hyatt Regency Greenwich on Thursday morning, October 23.  He introduced Stan Crow for a presentation of S.Crow Collateral Corp.'s "collateralized installment sale" or "C453" transaction process and the "monetization loan" which a third-party lender makes available to C453 sellers.

Stan Crow said that C453 sellers are likely to think of tax deferral as the main driver for C453 transactions.  What really drives C453, he said, is not so much the tax deferral as it is that the monetization loans are done in such a way that they decrease the lender's risk and increase the lender's return (at least on a risk-adjusted basis).  Because of that lending structure, he said, the "economics of the deal" are rather dramatically changed for the better for the lender.
With regard to the tax treatment of the seller and in response to a question about the tax doctrine of "...

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#197: An Insured Can Defer the Tax on Sale of a Life Insurance Policy, But Partly on One Ground, and Partly on Another.

October 09, 2014

 The question arose this week whether a “collateralized installment sale” or “C453” transaction can be used to defer the tax on the sale of an in-force life insurance policy, such as a sale by an insured to a life settlements investor.

The answer is yes, for part of the transaction.  The tax can be deferred on the other part, too, but for a different reason and in a different way.

The Internal Revenue Service treats life insurance policies as capital assets, but that fact alone doesn’t mean that an installment sale of such a policy will permit deferral of all of the tax under the installment-reporting section (Section 453) of the tax code.  That’s because part of the gain may be treated not as proceeds of the sale but as an assignment of an accrued right to receive ordinary income:  the net inside build-up that the insured would otherwise receive if the insured simply surrendered the policy to the life insurance company.  It has long been true that the IRS doesn’t generally allow taxpayers to escape tax on earned ordinary income by assigning that income to someone else.  When an insured sells his or her policy, that part of the selling price which is a substitute for net inside build-up will be taxed as ordinary income (that is, not as capital gain from the sale of a capital asset), and a C453 transaction by itself doesn’t enable the insured to defer the tax on that part.

For the insured to be able to defer tax on the sale of a life insurance policy, I recommend that the insured sell, pursuant to an installment contract with S.Crow Collateral Corp., only a fractional interest in the policy, that is, all of the policy except the net inside build-up, which will continue to be the insured’s property. ...

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Stanley Crow, our Editor

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.

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As a principal only, S.Crow Collateral Corp. does not act in the capacity of a broker, sales representative, investment advisor, or tax or legal advisor; does not sell or recommend any security; and does not accept any transaction fee or payment for transaction services. No part of The Latest Installment is intended to be, or be received as, tax, legal or investment advice.

Circumstances may affect tax and legal outcomes. Each transaction is different and unique to each participant. Neither S.Crow Collateral Corp. nor any of its officers or employees may or does provide tax, legal or investment advice. Nothing in The Latest Installment is intended to be, or may be taken to be, tax, legal or investment advice. Interested parties should consult their legal, tax and investment advisors before participating in any transaction.