Structured Installment Sale for Small Business Sales

This document is a guide that explains the concept of a Structured Installment Sale, particularly in the context of selling a small business. It outlines the potential tax implications associated with receiving sale proceeds in a lump sum, including capital gains taxes and state income taxes. The guide presents a case example involving a dentist named Jose, who sells his dental practice for $2,500,000. It details the financial calculations related to his sale, including the adjusted basis and selling expenses, leading to a capital gain of $1,450,000. The document compares the tax outcomes of a Structured Installment Sale against a lump sum payment, highlighting the tax savings Jose can achieve by opting for the installment method. It describes how the structured sale works, including the roles of the buyer, seller, and insurance company involved in the process. The guide emphasizes the importance of consulting with legal and financial advisors when considering such sales.