Step-by-step mechanics of a Structured Installment Sale: the seller, buyer, escrow officer, assignment company, and A-rated carrier, what each one does, what paperwork is required, and how the wire flows at closing.
A plain-English guide for sellers: how a structured installment sale defers the tax when you sell a business, practice, or property — the math, the alternatives, and how to know if your deal fits.
Drop your info — instant PDF download + within 1 business day Hans will email a preliminary read on which structure fits your deal. No retainer. Carrier compensates the broker — not you.
📞 Hans Goldstein · 213-340-2018 · CA Insurance License #4322192 · Independent §453 specialist · Goldstein & Co. LLC
When most people hear “installment sale,” they think of the old-school version where the buyer pays the seller directly over time, like seller-financed real estate. That arrangement carries massive buyer-default risk for the seller and is NOT what the SIS does.
Bottom line: the SIS keeps the §453 spread-tax benefit of the old installment sale but eliminates the buyer-default risk. The buyer wires the full sale price to escrow on closing day, same as any cash sale. Escrow splits the wire per the SIS rider: any cash carve-out goes to you, the rest goes to the assignment company which immediately purchases an annuity from an A-rated carrier. The carrier becomes the obligor.
Send me the sale price and rough basis and I'll email you the actual number within one business day — plus the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation · the carrier compensates the broker, not you.
An SIS is not a complicated structure once you see the players named. There are exactly five roles, and each has one specific job.
| Player | Role | When they act |
|---|---|---|
| 1. The Seller | Signs the Purchase Agreement with the SIS condition; signs the assignment addendum; receives the annuity payments for the term | Throughout |
| 2. The Buyer | Signs the standard Purchase Agreement plus the one-page SIS rider; wires full sale price to escrow on closing day; receives title | PA signing + closing |
| 3. The Escrow Officer | Receives buyer’s wire; splits it per the SIS rider (cash carve-out → seller; remainder → assignment company); records the deed | Closing day |
| 4. The Assignment Company | Receives the wire from escrow; immediately purchases an annuity from the A-rated carrier; becomes the third-party obligor on the seller’s payment stream | Day 1 after closing |
| 5. The A-Rated Insurance Carrier | Issues the annuity contract; pays the seller monthly/annually for the full term per the locked schedule | For the full 5-40 year term |
Take a $2M sale with a $400K cash carve-out and $1.6M structured. Here’s exactly what happens with the money:
Compared to a "normal" California real-estate sale, an SIS adds two documents. That’s it.
| Document | Required for normal sale? | Required for SIS? |
|---|---|---|
| CA Residential Purchase Agreement (or commercial equivalent) | YES | YES, with SIS condition added |
| Standard disclosures (TDS, NHD, etc.) | YES | YES, unchanged |
| Escrow instructions | YES | YES, with wire-split language |
| + SIS Assignment Agreement (1 page) | NO | YES, added at PA signing |
| + Annuity Contract (carrier-issued) | NO | YES, issued by carrier on Day 1 after closing |
Every deal is slightly different, carrier selection, term length, cash carve-out percentage, deferred-start structure if you don’t need income immediately. Run the calculator first, then call for the walkthrough specific to your sale.
Run the calculator → 213-340-2018
Hans Goldstein · Goldstein & Co.
Want more information on this? Put your name below and I’ll send it over — plain English, no cost. If your situation has a wrinkle, reply to the email and tell me what it is; I read them.
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