Monetized Installment Sale

Monetized Installment Sale

In monetized installment sale , the seller wants to sell his or her property and to immediately receive cash in an amount equal to Property’s fair market value, with the main goal of deferring  the recognition of any gain realized from the sale under the installment method;

The seller basically sells property to Intermediary in exchange for Intermediary’s unsecured installment obligation in an amount equal to property’s fair market value with an interest only loan over a long term, followed by a balloon payment of principal, at which at that point the seller’s gain from the sale would be recognized.

The intermediary immediately sells property to the buyer for cash and without gain on this sale.

The seller obtains a loan from the lender, with terms that match the terms of Intermediary’s installment obligation held by seller.

Ok, its a bit more complicated than this, and a specialized intermediary needs to be used. Call me if you have any questions. I am not a CPA so I can not give tax advice.