For California sellers of appreciated real estate, businesses, or other capital assets. Side-by-side comparison of a straight cash sale vs a Structured Installment Sale (IRC §453) annuity, using your actual 2026 federal LTCG brackets, NIIT, California marginal rates, IRMAA tiers, §483 imputed interest, §453A interest charge (for SIS premiums over $5M), depreciation recapture, and current A-rated carrier annuity yields. Models the bracket-by-bracket effective rate every year, not a flat assumption. Educational only — not tax, legal, or investment advice.
The Deal
One-time, non-deferrable. Local transfer + mansion taxes hit at closing on the gross sale price. SIS, CRT, and 1031 govern capital-GAIN recognition timing — they don’t touch the city’s claim on the deed transfer itself. Same dollar amount in all 3 scenario columns. Full breakdown
Enter $500,000 if MFJ and selling your primary residence, $250,000 if single, or $0 for investment property / business / land / inherited property. Used once per 2 years per IRS rules.
▸ Your taxable capital gain
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Recapture is recognized in year 1 of any SIS — it cannot be deferred. Enter $0 for goodwill-heavy business sales or assets with no depreciation taken.
Split-tranche planning: enter how much cash you want in hand at closing. The rest gets structured. For premiums >$5M, take enough cash to push the structured portion under $5M and eliminate the §453A interest charge entirely.
Max you can take here: — (above that, SIS premium goes negative). To eliminate §453A: —.
Full proceeds funding SIS.No carve-out at closing → no cash to split between HYSA and MYGA. To compare what you'd keep liquid vs locked, set Cash you want at closing above to a non-zero amount.
Liquid (HYSA / Treasury / CD)2.5%
$0 liquid
Pull-it-today money — IRS tax bill, CPA, FTB, emergency. 1099 every January, ordinary-income tax annually, no deferral.
Locked (MYGA)5.0%
$0 locked
A-rated carrier fixed-rate, tax-deferred compounding. 10% penalty-free withdrawal/yr in real life if needed.
Blended yield:$0 × 2.5% + $0 × 5% = 5.0% blended
$0 liquid = all locked at 5%. Higher liquid need = lower blended rate (because liquid earns less). SIS compares against this blended cash-side return.
The cost of liquidity (default 4%): if you carve out cash for a reason — house downpayment, college, debt payoff, life expenses — that portion has 0% growth (it gets spent). Only the portion you actually invest earns 4-5%. The 4% default reflects a typical 50/50 split: half spent (0%), half locked in MYGA at ~8% blended = ~4% effective on the full carve. Slide right if you’ll invest more, left if you’ll spend more.
⚠ Cash side reality — "pay tax first, then hope for yield":
Your return on cash can range from −30% (market crash) to +8% (equities upside). Even a "safe" 5% MYGA gets taxed annually on the interest at your marginal rate — net after-tax = ~3-3.5%. Spending the carve-out on a house/debt/college = 0% return. The default 2.5% reflects the realistic NET-after-tax expectation on a typical 50/50 spent/invested blend.
✨ The SIS genius: the full pre-tax sale price earns yield before tax. No "pay tax then hope" — bigger principal base, locked yield, A-rated carrier, no market risk. Mathematically impossible to match on the cash side, no matter what yield you pick.
If you need actual liquidity, real yield is closer to 3-4% — which makes the SIS tranche advantage larger, not smaller. MYGA + bucket strategy explained →
Annuity assumptions
COLA rider: cost-of-living adjustment (2-3%/yr inflation increase) availability TBD per carrier & sale specifics — quoted at structuring.
SIS annuity yield * AUTO from duration4.8%
* Ballpark estimate.Updated to current market (May 2026): auto-set from duration — ~3.8% at 5yr, ~4.5% at 10yr, ~4.7% at 15yr, ~4.8% at 20yr, ~5.0% at 30+yr. Based on actual quotes from Berkshire, Pacific Life, MetLife, Symetra, Mutual of Omaha, Independent Life. Get an exact rate quote by calling Hans at 213-414-2808 — current name-brand carrier rates often exceed these conservative estimates in today's environment. The under-promise/over-deliver framing means the actual broker quote is a pleasant surprise, not a disappointment.
SIS payment duration AUTO-OPTIMIZED FOR MOST CASH15 yrs
Default: auto-snaps to the duration that nets you the most cash after tax + IRMAA. Move the slider yourself to override.
Industry observation: the most common SIS duration sellers actually pick is 10–15 years — most want their money back inside their planning horizon. But shorter ≠ more tax-efficient. For California sellers age 63+ with $1M+ gains, 10–15-year structures often trigger Medicare IRMAA premium surcharges every year (annual MAGI of $200K-$500K stays above the $218K MFJ no-surcharge threshold for the full term). Longer structures (20–30 years) typically drop annual MAGI below IRMAA tiers — the calc accounts for this when picking the optimal. You're free to pick a shorter term for liquidity; just see the IRMAA disclosure in the optimizer to know what it costs.
SIS annuity COLA (annual payment growth)0%
Major fixed-annuity carriers allow a fixed COLA up to 3%/yr. Lower year-1 payment, grows annually. Useful when you expect ordinary income to drop in later years (Social Security only, etc.) — keeps early-year bracket pressure down while still inflating the income.
Defer income start? (working now, retiring later)
Set this to your planned retirement age. Most useful for 5+ years of deferral — short deferrals (1-3 yrs) give minimal benefit. Long deferrals (10-20 yrs) maximize bracket compression.
Retirement income at that age (SS + pension + small rental, etc.). This is what determines bracket compression once SIS payments turn on — auto-overrides the "Ordinary income post-sale" field for the payout years.
Deferred-start indexed-annuity carriers — current ballpark rate ~5.5–6.0% (vs ~4.0–4.5% on short fixed-carrier structures). Higher because: 10-yr Treasury (~4.5%) + investment-grade spread (~1%) + indexed-crediting risk premium (~0.5–1%). Rated A− by KBRA, institutionally backed. Major A+ AM Best fixed-annuity carriers cannot defer beyond 13 months — that's a real rating tradeoff to flag to your CPA. During the deferral period: zero gain recognition, zero income tax, premium accumulates inside the carrier.
CRT assumptions
CRT annual payout rate5.0%
IRS minimum 5%, maximum 50%. Higher payout = more annual income but smaller charitable deduction.
You & Your Tax Situation
Used for joint-life CRT actuarial factor + GUL survivorship pricing.
Default 90 (typical for healthy 65-yr-old). Override if you expect to live longer or have a known shorter timeline — affects CRT remainder, SIS heir math, and GUL premium pricing.
Use 1040 line 15 taxable income net of deductions, excluding the gain itself. SS + pension + rental net + W-2 + investment income.
e.g. 3 = working for 3 more years, then income drops. Set to 0 if income drops immediately after sale.
This is what the main "Ordinary income" field above is automatically set to as a default — change it here to model a custom transitional income level.
The calculator runs the SIS bracket-stacking year-by-year using the right income for each year. This is what makes the "13 years recommended" answer change as you adjust the retirement timing — if you retire in year 4 vs year 1, the optimal structure is different.
Young-seller advantage: SIS payments are §453 installment income, NOT §72(q) annuity distributions. There is no 10% early-withdrawal penalty regardless of your age. A 45-year-old can structure a 15-year SIS and collect every payment without penalty — a structural advantage the cash-into-MYGA path doesn't have.
GUL/S-GUL: cheapest pure death-benefit option. IUL: indexed cash-value flexibility, costs slightly more for same guaranteed DB. 10-pay: higher annual premium but the policy is paid up after 10 years (no premium obligation in retirement). Compare all types & the death-benefit cost curve →
Total economic value to family (SIS net + DB to heirs)
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You: $0 over life + Heirs: $0 tax-free at death
Ballpark estimate only. Premiums are illustrative based on healthy-non-tobacco underwriting at indicated age — actual offers require a full medical exam, attending physician statement, and carrier underwriting. IUL illustrated values depend on crediting strategy, cap rate, participation rate, and policy charges — the guaranteed DB shown assumes the no-lapse-guarantee rider is in force. 10-pay structures require the premium to be paid every year for 10 years; missed payments can collapse the no-lapse-guarantee. Insurance guarantees are subject to the claims-paying ability of the issuing carrier.
▸ GUL premium math
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Ballpark only — based on 2026 GUL guaranteed-to-121 market rates for healthy non-tobacco preferred. Real carrier quotes depend on full underwriting (med exam, APS, MIB) and vary ±10-20% between carriers. Tobacco use typically doubles the rate; significant health issues can push 1.5–3× preferred.
ILLUSTRATIVE DIFFERENCE VS A STRAIGHT CASH SALE
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Run your numbers above. The big number is the projected bracket-compression effect — federal and state tax that may be reduced (not just deferred) when the same gain is recognized across more years at lower marginal rates. Outcomes depend on your bracket, deal size, and the schedule you choose. Illustrative ballpark only.
✓ IRC §453 + §664 — 40+ years of established tax law
✓ CA-licensed producer (NPN 20602398)
🛡️ How secure is your money? A primer on carrier ratings + reinsurance+
Three layers protect your SIS annuity payments:
Layer 1 — Carrier financial strength rating. The major U.S. life insurance carriers used for fixed SIS structures are rated A+ by AM Best (the dominant insurance-industry rating agency, in business since 1899). A+ means "superior" capital adequacy, operating performance, and balance-sheet strength. The specialty indexed-annuity carrier used for deferred-start structures is rated A- by KBRA (Kroll Bond Rating Agency, an NRSRO-recognized agency), with institutional backing from a major private-equity firm.
Layer 2 — Reinsurance. Major life insurance carriers do not hold all the risk on their own balance sheets. They transfer significant portions of their annuity obligations to reinsurance companies — global capital pools that exist specifically to absorb policy risk from primary carriers. The largest reinsurers (Munich Re, Swiss Re, Hannover Re, Berkshire Hathaway's General Re, RGA) carry their own A+/AA ratings and combined hold over $1 trillion in capital. When you receive an annuity payment from a major U.S. carrier, that payment is effectively backed by a global syndicate of reinsurers behind the primary carrier's name. This is why even the rare large-carrier failures (Executive Life, 1991) ultimately recovered nearly 100% of guaranteed payments to policyholders — the reinsurance layer absorbs the shock.
Layer 3 — State guaranty fund. California's Life and Health Insurance Guarantee Association (CLHIGA) is the statutory backstop. CLHIGA covers annuity contracts up to 80% of present value, capped at $250,000 per insured. For very large structured premiums this cap is a real consideration, but it's the third layer — the carrier's own balance sheet and reinsurance pool are layers one and two.
The practical result: for SIS premiums up to several million dollars at name-brand A+ AM Best-rated carriers, the layered protection is genuinely robust. The honest risk discussion for very large premiums (above the CLHIGA cap × premium ratio) is part of every discovery conversation with Hans, including how to split-tranche across carriers if you want to keep all balances under guaranty-fund coverage.
⚠ Hypothetical educational tool
This calculator generates hypothetical illustrations only. Yield assumptions, payment schedules, tax calculations, and structure recommendations are educational projections and do not represent actual offers, quotes, or endorsements from any specific insurance carrier or structured-settlement broker. Actual rates, products, and contract terms are quoted by carrier-appointed structured-settlement specialists at the time of placement and vary by carrier, duration, deal size, market conditions, and the seller's specific facts. Hans Goldstein is a California-licensed insurance and annuity producer (NPN 20602398) who provides modeling, education, and coordination only; SIS placement requires a separately-appointed structured-settlement specialist. Nothing on this page is tax, legal, or investment advice. Consult your CPA, your estate planning attorney, and a carrier-appointed structured-settlement specialist before acting.
Your effective tax rates on this gain (lump-sum)
Federal LTCG
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NIIT
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California
—
Combined
—
2026 thresholds: Fed LTCG 15% bracket caps at $600,050 MFJ / $533,400 Single. NIIT 3.8% applies above $250K MFJ / $200K Single in net investment income. CA top rate 13.3% above $1.44M MFJ.
IRMAA implication at this income: —
MATHEMATICALLY OPTIMAL SIS STRUCTURE
The math illustrates the most net cash with a — SIS term.
Not saying it's necessarily right for you — that depends on health, family, charitable intent, and risk preferences only you can weigh. But this is what the math says nets you the most after tax + IRMAA over the term.
Bottom line — your most cash
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⭐ The structural advantage SIS gives you
Your full pre-tax sale price works inside the SIS — not the post-tax remainder.
You can offer your buyer a price concession in exchange for cooperating on the SIS assignment addendum — and still net more than a clean cash sale. The SIS doesn't ask the buyer to take risk (the fixed or indexed carrier funds the obligation at closing as a lump sum from escrow); it just asks them to sign one extra disbursement-instruction document. That cooperation has value, and you can pay for it.
MAXIMUM CONCESSION YOU CAN OFFER & STILL BEAT CASH
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How to use this: if your property is listed at $3M, you can tell a buyer "I'll take $2.95M instead of $3M if you'll sign the SIS assignment" — that's $50K to them for one signature. The buyer's lender funds normally, the wire splits at escrow, the buyer walks away with no ongoing obligation. The illustration shows net after-tax exceeding the full $3M cash price scenario. This is the unlock most SIS practitioners never bring up — they pitch SIS as a favor the buyer is doing for the seller. It's not. It's a negotiation that creates value on both sides.
The simple answer
Sell for cash → one big check today. Use SIS → 25 years of checks.Both numbers below are after-tax, after-yield — net dollars in your pocket.
Cash sale — compounded
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Year-1 tax bill paid, rest reinvested
SIS — compounded
—
over 25 yrs, taxed yearly, reinvested
SIS keeps you ahead by
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Same yield assumption on both sides. SIS wins because the IRS doesn’t bracket-stack you in year one, and your money compounds on a larger pre-tax base.
Detailed three-way breakdown (Cash · SIS · CRT) below — including IRMAA, city tax, depreciation, and buyer concession analysis.
Post-sale annual income — cash side
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interest on after-tax lump (taxed yearly)
Post-sale annual income — SIS side
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SIS payment + cash carve interest
SIS pays you ~—× more per year than living off the after-tax cash lump — without ever touching principal.
📋 Show me the math — for dummies (and CPAs)plain English breakdown
Cash sale — Year-1 tax
All due April 15 of sale year
Gross sale price—
Cost basis—
Taxable gain—
Tax stack
Federal LTCG (0/15/20% stacked)—
NIIT 3.8%—
CA income tax (up to 13.3%)—
CA MHST 1% (over $1M MAGI)—
§1250 depreciation recapture (25%)—
City/county transfer tax—
IRMAA (2-yr lookback, both spouses)—
Total tax (Year 1)—
Net to seller—
SIS — over 25 years
Tax follows the income, year by year
SIS premium (structured)—
Carrier credit rate—
Gross profit ratio (gain ÷ price)—
Per-year breakdown
Annual payment (gross)—
⤷ basis recovery (tax-free)—
⤷ gain recognized (LTCG)—
⤷ imputed interest (ordinary)—
Tax per year (average)—
Net per year (after tax)—
Over the full term
Total gross payments—
Total tax paid—
Net to seller—
Advantage vs cash—
Citations:Federal LTCG brackets (IRC §1(h)) · NIIT 3.8% (IRC §1411) · CA income tax R&T Code §17041 · CA MHST §17043 · §1250 depreciation recapture · IRMAA Medicare 42 CFR §408.20 · §453 installment sale gain recognition / gross profit ratio (Reg. §1.453-2) · §453A interest charge on >$5M aggregate · §483 imputed interest. Numbers use 2026 brackets. For your client’s exact filing, the CPA should verify.
↓ Full three-way breakdown ↓
Three-way comparison
Cash sale
Take it all in Year 1
Net to you over term
—
Compounds AFTER-TAX only. Sale price — − Year 1 tax — = — compound base. SIS compounds the FULL pre-tax amount.
Annual income (drawdown)—
Total tax paid Year 1—
To heirs at death—
heirs—
✓ Includes 2026 Medicare IRMAA surcharge
SHOW TAX BREAKDOWN ＋
Sale price—
NIIT—
California tax—
Recapture (sec 1250)—
After-tax proceeds at closing—
Cash side compounds the AFTER-TAX amount only. $X sale − Year 1 tax = $Y after-tax → that’s what earns the yield. SIS compounds the FULL pre-tax sale price for the same number of years at the same yield. Same rate, much bigger principal base = SIS structural advantage. See The Genius explainer → Principal drawn evenly over N years matching SIS depletion. Full CA tax stack →
Recommended
SIS
Structured Installment Sale
Net to you over term
—
vs cash—
Annual income (monthly × 12)—
Total tax paid over term—
To heirs (remaining payments)—
✓ Annual MAGI stays under IRMAA threshold
SHOW STRUCTURE DETAILS ＋
Premium structured—
Total annuity received—
Effective rate on deferred gain—
Recapture tax Year 1—
Accum value end of deferral—
§453A interest (if >$5M)—
§453A applies (>$5M)
—
+ Cash you took at closing—
A-rated AM Best carrier assumes obligation. Pro-rata gain recognition; non-commutable. 100-yr §453 history →
If you also have charitable intent
A Charitable Remainder Trust (CRUT — the variant attorneys typically draft, or CRAT in narrower cases) drafted by your estate-planning attorney can produce a directionally comparable income stream to the SIS shown above, plus an upfront charitable deduction worth ballpark 20–40% of the asset value. —
Precise CRT/CRUT math depends on the §7520 rate the month of funding, payout percentage, term type, and IRS Pub 1457 actuarial factors — your attorney runs the exact numbers. The catch: the trust remainder goes to charity at death, so heirs receive nothing from the trust itself unless you layer in a wealth-replacement policy. See how wealth replacement closes the gap →
CRT
Charitable Remainder Trust
Net to you over life
over 25 yrs (your life expectancy − age)
⚠ CRAT is irrevocable — pays until death, can’t be unwound. Early death = less to you, more to charity. Adjust life expectancy above to model scenarios.
A 5.70% a competitive MYGA looks better than a 4.5% SIS — until you remember the comparison invests after-tax proceeds vs the SIS structuring the full pre-tax sale price. Same underlying $1 of sale, three different yields after tax actually hits your pocket:
Cash → MYGA
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after-tax / annual / on original sale
SIS annuity
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after-tax / annual / on original sale
CRT payout
—
after-tax / annual / on original sale
Assumes the cash path puts net-of-tax proceeds into a 5.70% MYGA (taxed annually as ordinary income), the SIS uses your current slider yield on the full sale price, and the CRT uses your current payout rate. The SIS and CRT preserve the full pre-tax principal — that's the structural advantage no MYGA can match.
After-tax IRR & real-dollar value (inflation-adjusted)
For high-income sellers where bracket compression doesn't apply — or anyone evaluating whether the spread structure beats just paying the tax and investing — IRR is the apples-to-apples number. Real-dollar PV uses a 3% inflation assumption.
Cash sale
SIS
CRT
After-tax IRR
—
—
—
Net PV @ 3% inflation
—
—
—
Nominal $ total to you
—
—
—
—
THE CASH-WINS-IF-INVESTED OBJECTION
"I'll just take the cash and invest it" — here's the yield investments are illustrated needing to produce the same after-tax annual income as the SIS, drawn down over the same term:
REQUIRED GROSS YIELD ON CASH TO MATCH SIS INCOME
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The honest question
“Do you really think your money — when you want some for liquidity — is going to perform over 8% for that whole bucket, every year, for the full term?”
If yes — take the cash, do something else with it. If no — at a carrier-quoted credited rate around 4.5% on pre-tax principal, the bracket-compression math can be approximately equivalent to an after-tax bond yield in the 7–9% range for a high-bracket California seller, depending on the actual carrier quote at placement and the seller’s bracket. The advantage isn’t a higher yield in isolation — it’s that pre-tax principal compounds inside the annuity instead of the after-tax remainder compounding outside it.
How this is calculated: the SIS pays you a specific after-tax dollar amount every year for the full term. To match that same after-tax annual income stream from your cash sale proceeds — drawing them down over the same number of years — your investments need to earn the yield above (gross, before tax). Cash gets taxed at ~32% combined on investment income before you can draw it. The SIS structure preserves the full pre-tax sale price inside the annuity and gives you the bracket-compression benefit on the gain itself. For reference: Treasuries pay ~4.5%, investment-grade corporate bonds ~5.5–6%, anything higher carries real credit, duration, or equity risk that the SIS does not.
Best path for your situation
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Run the numbers above — once we know your gain size, post-sale income, and goals (legacy vs maximum cash), the math points to a single best path.
California-specific gotchas this calculator can't model
⚠ Excluded from this calc: city/county documentary transfer taxes ($1.10/$1,000 in all CA counties) AND city-level mansion taxes — LA Measure ULA (4-5.5% above $5.15M), SF Prop I (up to 6% above $25M), Culver City (up to 4%), Santa Monica Measure GS (up to 5.6% above $8M). These apply at closing regardless of structure. Full city/county breakdown →
Prop 13 reset on replacement. If you sell and buy another CA property, your property-tax basis resets to current value unless you qualify for Prop 19 portability (one-time, age 55+, same county or one of the participating counties, value cap). The annual property-tax hit can be $20K–$80K/yr higher on a comparable replacement.
3.33% CA withholding for non-resident sellers. If you're closing while resident elsewhere, escrow withholds 3.33% of sale price (or 12.3% of gain) at close. Reconciled on the year-end return but it eats Year 1 liquidity.
Bulk Sale Notice for business sales. California Commercial Code §6101 et seq. requires a recorded notice 12 business days before close on business sales transferring inventory or fixtures. Skipping this exposes the buyer to the seller's creditors.
NIIT is federal only. California has no equivalent 3.8% surtax — the Mental Health Services Tax (1% above $1M taxable income) is a separate CA-only adder, already in the calc above.
CA conforms to §453 but not all of §453A nuances. Talk to your CPA — California can in rare cases tax differently on installment payment timing if you change residency between sale year and a payment year.
Indexed-annuity carrier not available in NY. If you have NY-state property or NY-resident issues, the major A+ fixed-annuity carrier is your only option for SIS in that situation.
CA Life & Health Insurance Guarantee Association cap. CLHIGA covers annuity contracts up to 80% of present value with a $250K cap per insured. For very large structured premiums this is a meaningful seller-protection consideration on top of the carrier's own A-rating.
90-second form. PDF report + Hans follows up within 24 hours.
Why this calculator is different. Most SIS/CRT pitches show flat-rate "tax savings" using the seller's top bracket. That's wrong for the most common SIS sweet-spot prospect — a retired California seller whose ordinary income is moderate. We bracket-stack the gain year-by-year so the savings story reflects the projected rate reduction that can result from spreading recognition under the 15% federal LTCG threshold and the $250K NIIT floor — not just a time-value-of-money argument. Outcomes depend on the seller’s actual bracket, deal facts, and current tax law.
Disclaimers. Educational only — not tax, legal, or investment advice. The CRT charitable deduction is approximated using a simplified single-life remainder factor (or joint-life adjustment) at an assumed 5% IRS §7520 rate; the actual deduction depends on the §7520 rate published the month the trust is funded, the precise payout rate, term type (life vs term of years), and individual actuarial factors per IRS Pub 1457. CRT distributions are taxed under the tier system (ordinary, capital gain, tax-exempt, return of corpus) and our model approximates the blended rate over the period. SIS annuity yields shown are auto-derived from duration based on current 10-year Treasury + investment-grade spread; locked rates depend on duration, carrier, and market conditions at issue and are quoted by the placing broker at execution. GUL premium estimates are ballpark only based on healthy-non-tobacco underwriting; actual offers require medical exam, APS, and full underwriting. §453A interest charge applies to installment obligations above $5M; we apply current short-term AFR + 3 as a proxy. State law, federal tax law, IRMAA brackets, and product pricing change — consult your CPA, estate attorney, and a licensed insurance producer before acting.
About Hans & how placement works. Hans Goldstein is a California-licensed insurance and annuity producer (NPN 20602398). He models the math, educates the seller, and coordinates with the seller's CPA and estate attorney. SIS placement itself is referred to and executed by carrier-appointed structured-settlement specialists (carrier-appointed structured-settlement specialists), with whom Hans maintains co-broker referral arrangements. CRT trust drafting is performed by the seller's estate planning attorney; Hans coordinates but does not draft trusts. Compensation on placed contracts is fully disclosed in writing on every case.
Get your full analysis as a PDF
Hans will follow up within one business day with a written breakdown of which path makes the most sense given your specific situation and current carrier rates. No obligation, no sales pressure.
🧮 For math nerds — the math we are mathingfull formula derivation
Every variable used by the recalc engine. All brackets are 2026 federal + California. Formulas use the same notation a CPA would recognize. If a number doesn't tie out against your software, walk through the chain below and tell us which step is off.
# CA taxes LTCG as ordinary income — uses progressive brackets up to 13.3% (incl. 1% mental-health surtax) CAtax = bracketTax(OrdinaryIncome + Gtaxable) − bracketTax(OrdinaryIncome)
5. CA Mental Health Services Tax (§17043 · 1% above $1M)
# Standard PMT formula for amortizing annuity: PMT = SISpremium × r ÷ (1 − (1 + r)−n)
where:
SISpremium = SalePrice − Mortgage − Recapturetax − CashCarveout
r = annual carrier credit rate (3–5% market, locked at placement)
n = term in years (5–40)
TotalGross = PMT × n
TotalInterest = TotalGross − SISpremium
7. Per-year §453 gain recognition (Reg. §1.453-2)
# Each payment splits 3 ways:
Basisyr = PMT × (1 − GPR) # tax-free recovery of basis
Gainyr = PMT × GPR # taxed as LTCG
Interestyr = (TotalInterest ÷ n) avg, or per-year amortization (declining)
# Tax per year stacks against current ordinary income:
Taxyr = FedLTCG(Gainyr, OrdIncome+Interestyr) + NIITyr + CAtax,yr + MHSTyr + Interestyr×OrdMargRate
# 2-yr lookback: sale-year MAGI hits Medicare premium 2 yrs later
Tier 6 (MFJ): MAGI > $750,000 → +$487/mo Part B + $91/mo Part D each IRMAAannual = (Tier surcharge per person) × (1 or 2 spouses on Medicare) × 12
# Cash yield required to MATCH SIS's annual net income, drawn down over n yrs:
Solve for yBE in:
NetToCash × yBE(1−t) × n ÷ [1 − (1 + yBE(1−t))−n] = SISnet
Citations:IRC §1(h) Federal LTCG brackets · §453 installment sales · §453A interest charge · §483 imputed interest · §1411 NIIT · §121 primary-residence exclusion · §1031 like-kind exchange · §1250 depreciation recapture · Reg. §1.453-2 gross profit ratio · CA R&T Code §17041 income brackets · CA R&T §17043 MHST · 42 CFR §408.20 IRMAA. All 2026 brackets. Source code is the inline JavaScript on this page — view-source to audit.
Take this with you
Save this analysis · Email it to yourself or your CPA
Save a beautiful PDF for your records, or have Hans send it to you (or directly to your CPA) from [email protected] with the full math breakdown and IRS citations.
PDF saves locally. Email comes from [email protected] with the full report inline.
Every factor a CPA cares about: §1202 QSBS · §1245 · §453A · §199A QBI · city transfer tax · §121 · prior 1031 carry. Color-coded live math breakdown — every formula visible.
Skip if: you want lifetime planning or bucket allocation.
Optimizes SIS term 5-40 yrs across your full retirement. Models RMDs (age 73/75), Roth conversion ladder, SS taxation (0/50/85%), IRMAA 2-yr lookback, bracket inflation. Year-by-year ledger with IRS citations on every formula.
Skip if: you don't have a pre-tax IRA/401k or you just want the year-1 number.
Honest order: If you're new here, start with Quick. If your CPA needs to verify the math, send them Tax-Detail. If you're planning how to actually deploy the proceeds, use Cash-Flow Planner. If you're age 55+ with a pre-tax IRA, the Lifetime Optimizer is the strongest tool. All four show the math.
⚡ What this calculator doesn't model
Edge cases not modeled here: §1202 QSBS founder exits · §1245 ordinary recapture on business equipment · §453A interest charge on outstanding obligations >$5M · multi-state source taxation if you move out of CA · IRD treatment of SIS payments at death · Charitable Remainder Trust comparison · trust structures (GRAT/IDGT/ILIT) · estate tax exposure · QCD strategy · K-1 / lumpy income events · future tax law changes (TCJA sunset, RMD age, IRMAA recalibration).
If any apply to your case — that's the 20-min consult conversation. 📞 213-414-2808
