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Structured sales

Structured sale and selling a business

What is a Structured Sale?

In its most base form, a Structured Sale allows the seller of a business or practice to have the benefits of a lump sum sale, and yet preserve the tax benefits of deferring constructive receipt of income for a period of time. This period of time is determined uniquely by the seller in conjunction with their professional tax advisor.

In many ways, the Structured Sale works similar to a 1031 exchange in which funds are not immediately taxable due to an intermediary such as a bank or other financial institution receiving the funds. The funds are then held by Midwest Trust and held in Treasury Bonds, and the seller receives payments per the outcome predetermined by the seller and their tax advisor.

How do you execute a Structured Sale?

There is obviously a bit more to everything, but all that is required is an addendum to the current sales agreement. We work with the seller and buyer (there is no change in purchase price and the buyer still receives title at the close of escrow as originally scheduled) and their respective advisors.

Are there any costs?

There is also no out of pocket costs or upfront fees to either the buyer or seller when constructing the Structured Sale.

The Structured Sale is best suited for sales of more than $500,000 and are fully funded, and each is designed specifically for the Seller.

More information about Structured Sales

If you would like some more information about a Structured Sale, the following articles may be of interest to you:

  1. Advantages of a Structured Sale
  2. Tax implications of a Structured Sale
  3. Capital Gains tax deferral benefits of a Structured Sale
  4. Structured Sale and 1031 benefits
  5. Steps of a Structured Sale
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