Tax Deferred Cash Outs

Installment Sale / Liquidity Options

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Structure

  1. Monetized Installment Sale - 30 year installment sale coupled with a nonrecourse commercial loan from third party lender Based on PLR 20123401f and  judicial doctrine. 

     

  2. Installment Sale to Value Added Dealer- 30 year installment sale coupled with an investment into seller's investment holdings entity.Investment is a  minority, unsecured investment at a fixed interest rate common to typical passive equity arrangements.Seller automatically allowed to freely access Liquid Capital's platform of data tools, software, services and membership facilities (annual value of over $100,000) as well as other services as seller requires. Based on PLR 20123401f, IRC 7701 and judicial doctrine.

     

  3. Installment Sale with Reinvestment into A Rated Investments. - 30 year installment sale. Proceeds of asset resale go into escrow then invested into A rated products,  or money managers that Seller and Seller's advisors approve of. Withdrawals from these investments are made to make payments to Seller under the terms of the customized installment agreement.

Typical Application

Seller wants to technically comply with the PLR by the letter of the law. 
 

 


Sellers want to follow Economic Substance doctrine codified in IRC 7701 in that it i) changes, in a meaningful way, the taxpayer’s economic position, AND ii) provides the taxpayer a substantial purpose (apart from Federal income tax effects) for entering into the transaction.

Often preferred on larger transactions and more sophisticated sellers and advisors.


Seller interested in predictable ongoing income. 

 

Seller wants to avoid risk of reinvesting sale proceeds.

 

Advisor has good use to allocate the bulk of the sales proceeds into life insurance, annuities, or other financial products. 

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