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.
Case Example Video
Discover how a tax-efficient, structured installment sale can benefit both buyer and seller in a sale of a property or business.
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 Life4 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.
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.
What are the advantages of a Structured Installment Sale?
Tax Benefits
Deferral and potential reduction of capital gains tax, Net Investment Income Tax (NIIT) & state income tax1
Guaranteed Income
Conversion of proceeds into a guaranteed income stream, immune to market volatility and performance2
Trustworthy
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.
Article: Tax Strategies for SIS
Explore the strategic ways to help minimize capital gains taxes when selling a business or property with a Structured Installment Sale.
Article: Benefits for Buyers and Sellers with SIS
Find out how structured installment sales can help sellers defer taxes while generating guaranteed retirement income.
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