Dudek Kelly Tax Deferral Solutions
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Problem
Capital Gains When Selling a Property
Sellers Could Take a Huge Hit When Selling Property
When a property is sold for a lump sum cash payment, the seller typically has to recognize the entire gain as taxable in the year of the sale. Granted, there are many conditions that apply that will impact the percentage calculation, but for argument's sake, here is a worst case scenario.
Illustration – Selling a Home in California:
For example, someone selling a property with $1mm+ subject to capital gains in California might face a combined federal and state capital gains tax rate of 37.1% (20% federal + 3.8% NIIT + 13.3% state)
Capital Gains When Selling a Business
And It's the Same Situation When Selling a Business
When a business is sold for a lump sum cash payment, the seller can also typically recognize the entire gain as taxable in the year of the sale. Unlike a real estate transaction, there are very limited options for a business owner to mitigate their capital gains tax liability.
Other factors can also impact the amount of capital gains such as overall tax burden, the specific structure of the business (e.g., C corporation, S corporation, LLC), whether it's an asset or stock sale, and the seller's overall taxable income in the year of the sale. Again, for argument's sake, here is a worst case scenario.
Illustration – Selling a Business in California:
The same federal and state capital gains rates apply to a business sale, which can result in the maximum potential capital gains tax liability for a high-income earner selling a business in California can reach 37.1%.
Solution: Mitigate Capital Gains Via:
Structured Installment Sales
A structured installment sale is a unique tool that, following the tenants of IRC 453 and through the use of periodic payments, allows the seller of a business or property to defer tax liability on the capital gains until the years in which the payments are received.
Solution: Mitigate Capital Gains Via:
Structured Installment Sales
A structured installment sale is a unique tool that, following the tenants of IRC 453 and through the use of periodic payments, allows the seller of a business or property to defer tax liability on the capital gains until the years in which the payments are received.
Our Team
Dudek Kelly Trusted Advisors
Customers
Structured Installment Sale Advisors & Customers
Trusted Advisors and Their Clients Who Count on Dudek Kelly
Dudek Kelly guided my clients through every stage of the SIS process.
“Having worked with the Dudek Kelly group for many years, I can attest to their professionalism and willingness to turn over every stone until they find the best solution for their clients’ needs. Dudek Kelly has assisted clients in a range of sales and there isn’t an opportunity they won’t be able to find an answer for. 10/10, would recommend!”
Eric SoHayda
Independent Life Insurance
We were able to manage capital gains and secure our retirement.
Knowing my goal to avoid a lump sum capital gains obligation, Dudek Kelly provided me options and information that best fit my financial goals and planning.
Having my capital gains tax obligation spread over many years and a secure annuity keeps my retirement goals on track.
Ed Souza
Customer
Dudek Kelly Structured Installment Sale
Insurance Partners
- For eligible transactions and appropriate sellers, the advantages of a structured installment sale to the seller, compared with a cash only sale, can be substantial.
- Their potential benefits from a structured installment sale can include substantial tax savings resulting from deferred taxes at capital gains rates plus additional estate planning opportunities.
- A qualified seller using the structured installment method incurs capital gains as each installment is received rather than at the time of sale.
- Dudek Kelly partners with the top-rated Structured Installment Sale insurance providers to mitigate any risk to sellers.
Join the Dudek Kelly
Trusted Advisor Network
Become a member of our nationwide network of SIS Trusted Advisors
Dudek Kelly refers Trusted Advisors to clients to help them navigate the process of selling a home or business using Structured Installment Sales. Complete a brief survey and we will contact you directly. It’s free to join.
Join the Dudek Kelly
Trusted Advisor Network
Become a member of our nationwide network of SIS Trusted Advisors
Dudek Kelly refers Trusted Advisors to clients to help them navigate the process of selling a home or business using Structured Installment Sales. Complete a brief survey and we will contact you directly. It’s free to join.