TDS only acquires appreciated assets form Seller on an installment sale – contract basis. This is the legal mechanism that allow Sellers to delay taxation and choose a tax payment schedule which best suits the seller.
The Installment Sale Method recognizes income to the Seller of Appreciated Asset, as the income is received by seller over a period of years chosen by the Seller. The Seller is taxed, in subsequent years from the date of the sales transaction, as the proceeds from the sale of an appreciated asset are received over the period of time selected by the Seller.
Since, the beginning of the Federal Tax Code, it has been a well recognized principal that taxation is delayed when a seller of an appreciated asset is to receive payments over a period of years and that the owed taxes should be payable as the taxpayer/seller receives payments.
A Seller only pays its tax liability as it receives sale proceeds!
Seller’s of Appreciated Assets can lawfully delay taxes from sale transactions by spreading the net sale proceed payments they receive over a number of years!
Sellers of Appreciated Assets can Maximize the economic benefit of their Sale Proceeds by controlling their tax payment schedules by initiating Installment Sales with TDS as an intermediary Buyer of Seller’s Assets.
Why wouldn’t you delay taxes to take advantage of investing a larger Pre-tax Net Sale Proceeds?
You will have a larger Net Amount of Capital to invest because you delayed paying a large amount in taxes. Seller’s investment yields will almost always be larger with delaying taxes as the compounding of returns is also achieved on the deferred taxes.
Your deferred tax obligation works for you over time to keep & build wealth and your net worth increases with an TDS Installment Sale.
You have the advantage to delay your tax obligation into the future . . . picking a tax payment schedule corresponding to your financial needs for income distributions.
Benefits: Delaying Taxes and paying them in the future is better than paying your taxes today.
- All your Net Sale Proceeds work for you Now vs. paying taxes today. You pay taxes in the future according to a schedule which best suits your financial needs – a schedule determined and picked by you not the IRS
- You control when you pay taxes not the IRS
- The full amount of your Gross Sale Proceeds are flexibly invested to meet your goals and to preserve capital for specific financial needs both today and in the future
Qualifying Asset for Installment Sales:
- Failing 1031 Exchange or Equity Boot
- Investment Real Estate (Multi Family, Apartment Buildings, Commercial Property, Industrial and Land)
- Investments (Privately held stock, Partnership interests, and Collectables)
- Non Investment Real Estate (Primary Residence and Vacation Home)
- Payoff of existing Notes – Balloon of an existing Installment Sale promissory note
- Some Personal Property (Boats, Cars, and Planes)
TDS purchases these types of appreciated assets via three (3) types of installment sales: the Traditional Installment Sale; Intermediary Installment Sale; and Structured Sale.