How Structured Installment Sales Work
How does a Seller implement an ISR Installment Sale transaction?
If you’re wondering how structured installment sales work exactly, the experts at Installment Sale Realty are here to explain. ISR is a highly specialized business focused on Installment Sale transactions and assuming the periodic payment installment sale – debt obligations owed to the Sellers by Buyers.
To assist Installment Sale Sellers and Buyers, ISR has simplified an Installment Sale transaction between a Seller and Buyer to 3 steps:
- Seller and Buyer amend their Selling/Buying Contract:
This allows the Seller the option to take payment of their Net Sale Proceeds over a number of period payments. For example, Seller wants the ability to take their net sale proceeds over a period of 10 years and to receive 2 payments per year. ISR complimentarily provides a sample Amendment to the Sale Contract for the Seller and Buyer to discuss with their legal representatives.
- Seller signs & sends back to ISR, IRS’ “Notice to Seller Document”:
This indicates that the Seller has acknowledged and assented to ISR’s assumption of Buyer’s installment sale payment debt obligation to Seller.
- ISR and Buyer enter into a debt assumption agreement:
This is a contract between the Buyer and ISR, where ISR takes over Buyer’s debt obligation, ISR steps into Buyer’s shoes and now becomes directly obligated to make payments to Seller, and ISR thereby becomes entitled to receive the Net Sale Proceeds at the Sale Closing to collateralize ISR’s payment obligation to Seller.
Every Sellers’ Installment Sale transaction is custom tailored to meet the specific financial needs of the Sellers. ISR uses the term “structured” to mean a customized transaction designed by a capital gain tax reduction transaction LLM Taxation Attorney.
ISR preferences investing the money that Buyer transfers at closing into private wealth management at top tier private wealth banks, further, managed by a top 250 wealth advisor located in Boston, Massachusetts. This provides two levels of safety as a mechanism to provide Sellers security that investment criteria will produce predictable installment cash flow disbursements. Sellers can more flexibly choose installment sale payments streams to be quarterly, semi-annually, annually or to delay payments first to build up and increase fair market values of investments prior to the first payout being made to sellers.
Contact us today to learn more about how we can help facilitate your structured installment sale!