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Structured Installment Sale

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What is a Structured Installment Sale?

A Structured Installment Sale (SIS) is an annuity that allows you to defer potentially large capital gains tax and receive guaranteed installment payments over time. This installment sales approach allows you to choose what amount you’d like to receive now and how much you’d like to put into an annuity. The payment stream can be set to fit more immediate needs or help plan for the longer term, like retirement.

How does a Structured Installment Sale work?

Instead of receiving one lump sum, all parties agree to periodic payments for a stated number of years as a condition of the property sale. The periodic payment obligation is then transferred to MetLife Assignment Company, Inc. (MACI) by the Buyer, who pays the full premium to cover the payments. MACI takes the Buyer’s premium check for the periodic payments and purchases an annuity from Metropolitan Tower Life Insurance Company (Met Tower Life). Met Tower Life then issues the scheduled payments to the Seller on behalf of MACI. Both entities are wholly owned, U.S. based subsidiaries of MetLife, Inc. and, as such provide great confidence for all parties.

DISCOVER

Why choose a structured installment sale

Selling a real estate property or business can have significant tax implications. When a seller receives their sales proceeds in a lump sum, they might face not only capital gains taxes, but also net investment income taxes and state income taxes, which are due in the year of the sale.¹

Our Structured Installment Sale solution can help reduce taxes on the proceeds, while providing a stream of guaranteed income over time to help secure their financial future.^1,2

Tax Implications of Selling Real Estate with a Structured Installment Sale

A structured installment sale (SIS) allows the seller of real estate, property, or agricultural land to be paid in future installments over a period of time, rather than a one-time lump sum. Because taxes will then be paid based on the income received each year, this structure helps the seller defer their capital gains tax and potentially decrease the overall tax liability on the sale.

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Tax Implications of Selling a Business with a Structured Installment Sale

A structured installment sale (SIS) may offer beneficial tax treatment when selling a business because the taxes are paid as installment payments over a period of time, rather than being paid entirely in the year the business is sold. This allows sellers to defer and potentially reduce their capital gains taxes and other tax obligations by spreading the payments out over a longer period.

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What are the advantages of a Structured Installment Sale?

Value

Deferral and potential reduction of capital gains tax, Net Investment Income Tax (NIIT) & state income tax¹

Value

Conversion of proceeds into a guaranteed income stream, immune to market volatility and performance²

Value

Payments secured by a financially sound and trusted company³

Explore potential outcomes with Structured Installment Sales

CASE STUDIES AND RESOURCES

Case Study: Small Business Sale

Read Jose's case on selling a dental practice. Learn how an SIS helped him defer capital gains tax and turned the proceeds into a guaranteed income stream.

Case Study: Real Estate Sale

Read Mary's case on selling a real estate property. Learn how an SIS helped her defer capital gains tax and turned the proceeds into a guaranteed income stream.

Whitepaper: Structuring an Installment Sale

Explore the mechanics of a Structured Installment Sale and how it works for business and real estate sales including the associated tax benefits.

*This product is currently available in 49 U.S. states plus PR, but not available in NY.

¹ Neither MetLife nor its affiliates offer tax or legal advice. Any discussion of taxes in this material is intended to be general in nature and based on our understanding of the tax laws as they currently apply. Tax laws are subject to change and to different interpretation. You should consult your own tax advisor to determine how the tax law applies to your situation.

² All guarantees are subject to the financial strength and claims-paying ability of Metropolitan Tower Life Insurance Company.

³ For current ratings information and a more complete analysis of the financial strength of Metropolitan Tower Life Insurance Company, please go to www.metlife.com and click on “About Us” and then click on “Company Ratings”.

⁴ The buyer's assignment of the periodic payment obligation is intended to be interpreted such that any periodic payments assigned to assignee qualify for installment sale treatment under Internal Revenue Code Section 453. To better preserve this tax result, the buyer remains indebted to the seller for future periodic payments, however, seller agrees to first look to the assignee and to not seek payments from the buyer unless and until the assignee is in default of its periodic payments obligations.

 Like most annuity contracts, Metropolitan Tower Life annuities contain certain limitations, exclusions and terms for keeping them in force. All guarantees are based on the claims-paying ability and financial strength of Metropolitan Tower Life. Ask a Metropolitan Tower Life representative for cost and complete details.