A structured sale is a “1031” alternative strategy that permits owners of highly appreciated real estate or a business to spread the taxes triggered on the sale over a specified period of time without the obligation of reinvesting the sales proceeds back into real estate.
The seller enters into an installment sale agreement under which a buyer promises to make periodic payments for a stated number of years. The buyer then assigns his or her periodic payments to an assignment company. The assignment company funds the payment obligation by purchasing an annuity from a major insurance company. Finally, the insurance company begins to make the payments to the seller under the terms of the sale and issues an agreement to pay on the performance of the assignment
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