What Is a Structured Installment Sale? Every Question, Answered
A structured installment sale lets you sell property for its full price but receive the proceeds over years, so the capital gain is taxed as the payments arrive under the installment method (IRC §453) instead of all in the year of sale. The buyer pays in full at closing; an assignment company takes over the deferred payments and funds them with a fixed annuity from a highly rated life insurer.
Buyer cash → Assignment Co. → fixed annuity → You, on schedule
Hans Goldstein structures installment sales for sellers and works alongside their CPAs. Email hans@goldsteinco.net or call 213-340-2018. Each link below answers one question in a few paragraphs, with the code section behind it.
How does a structured installment sale work?
- Before closing, you and the buyer agree in the purchase agreement (or an addendum) that part of the price will be paid in installments on a schedule you choose.
- At closing, the buyer pays the full price. The structured portion goes to an assignment company, which assumes the obligation to make the deferred payments.
- The assignment company buys a fixed annuity from its affiliated, highly rated life insurer (A or better by A.M. Best or equivalent) to fund the payments. You are the payee; you never own the annuity.
- You report the gain as you are paid, on Form 6252 each year (IRS Pub 537). Each payment is part tax-free return of basis, part gain, part interest.
What is the tax bill on your sale going to be?
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Two limits apply to every structure: §1245 depreciation recapture is taxed in the year of sale anyway (IRC §453(i)), and the payment schedule is locked once funded. The payment schedule is set in the contract, and the payments depend on the claims-paying ability of the assignment company and the insurer behind it. More on the basics: what is a structured installment sale and how the deal works.
How does it compare with the other ways to defer the gain?
- Structured installment sale vs 1031 exchange
- Can a structured sale back up a failed 1031 exchange?
- Structured installment sale vs Delaware statutory trust
- Structured installment sale vs deferred sales trust
- Structured installment sale vs opportunity zone fund
- Structured installment sale vs charitable remainder trust
- Structured installment sale vs seller financing
- Should I just pay the capital gains tax instead?
- Is a structured sale the same as a monetized installment sale?
- Is a structured installment sale legal?
How safe are the payments?
- What if the buyer defaults?
- Is a structured installment sale safe?
- Which insurance companies fund structured installment sales?
- Who is the assignment company, and who owes me the money?
- What if interest rates rise after I lock in?
How is a structured installment sale taxed?
- What is taxed in the year of sale? (§1245 recapture, mortgage over basis, cash at closing)
- How are the payments taxed each year?
- What is the §453A interest charge above $5 million?
- How does a structured sale affect IRMAA and Medicare premiums?
- Does it reduce the 3.8% net investment income tax?
- What is constructive receipt, and why does it lock the schedule?
- What are the related-party installment sale rules?
- What happens to the payments when I die?
- Can I speed up or borrow against the payments?
- How does my CPA report it on Form 6252? and the CPA guide to §453
- How is depreciation recapture handled?
How do I set one up?
- What is the minimum for a structured installment sale?
- When do I have to set it up, and how long does it take?
- What documents does a structured installment sale need?
- What does it cost, and who pays you?
- What interest rate does it pay, and how is it set?
- What payment schedules can I choose?
- Can I structure only part of my sale?
- How do I bring it up with my listing agent?
- Can the buyer refuse a structured sale?
- I am the buyer: what do I sign?
Does it work for my kind of sale?
- Selling a business
- Selling a rental property
- Selling land
- Selling a primary home above the §121 exclusion (the exclusion comes first)
- Selling a farm or ranch
- Selling a dental, medical or professional practice
- What doesn't work for a structured sale?
Can I run my own numbers first?
- Installment sale calculator (cash vs seller financing vs structured sale)
- Capital gains tax calculator for real estate
- Gross profit percentage calculator
- Form 6252 calculator
- Capital gains exit calculator and all SIS calculators
Frequently asked
Q: What is a structured installment sale in one sentence? A: It is an installment sale under IRC §453 in which the buyer pays the full price at closing and an assignment company, funded by a fixed annuity from a highly rated life insurer, makes the deferred payments to you on a schedule you choose before closing.
Q: Does a structured installment sale avoid capital gains tax? A: No. It defers the tax: you pay it as the payments arrive, often at lower brackets than a one-year sale. §1245 recapture is still taxed in the year of sale, and the interest on the payments is ordinary income.
Q: Can I set one up after the sale closes? A: No. The installment terms must be in the purchase agreement and the structured amount must go to the assignment company at closing. Once you have received or controlled the cash, the deferral is gone.
Q: Who is the structured installment sale for? A: Sellers of real estate, a business, land or a practice with a large gain who do not need all the cash at once and want the tax spread over years. It does not work for publicly traded stock, inventory or dealer property (IRC §453(b)(2), §453(k)(2)).
Who wrote this?
Find out what your sale is really going to cost you in tax, and what you can do about it
No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
Send me the sale price and roughly what you paid. Within one business day I’ll come back with the number you’re actually looking at and whether a structured installment sale can push it down. If it can’t, I’ll say that just as plainly.
You'll also get the plain-English Seller's Guide to §453: the math, the alternatives, and the cases where it does not work.
📞 Hans Goldstein · 213-340-2018 · CA Insurance License #4273294 · Independent §453 specialist · Goldstein & Co. LLC
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Run your specific numbers
The calculator runs your sale through real 2026 federal + state tax brackets and shows §453 savings vs lump sum side-by-side.
Run the calculator → 213-340-2018