Section §453 is the installment note provision of the Internal Revenue Code. Its purpose is similar to §1031 – to mitigate income taxes on the sale of productive property that will be reinvested again in productive property. Congress did not want productive property to become less productive because people were afraid to sell it for tax or liquidity issues.
When a purchase is made for an installment note, the gain is recognized but not taxable until and only as payments are made. If funds are reinvested, the income from 25 to 40% more capital can result in 25 to 40% more income, and lifestyle can be sustained while continuing to defer the gain. Notes should be constructed over a commercially reasonable period, but can be extended as desired by the parties.
Usually, you sell to us when you also have plans to give 20 to 30% of your gain payable in tax. 1. There is no money when we buy part of your business for a Note. By stepping up the value, though, we defer the 20 to 30% you were soon to pay in tax. 2. We give you a Note and a Pledge that is non-callable except on default. This protects you in that we cannot borrow against the Note.
Owning your assets in a way that makes them inaccessible to creditors.
Custom Structured Settlements LLC buys its interests from you for a Promissory Note when bringing asset protection benefits, strategic use of 75+ years of experience, estate and legacy coordination and other benefits. The sale of assets to us for a promissory note is not taxable until we make payments to it. When you turn around and sell the asset we now own part of for the same price, there is no tax on the interest we purchased for the same price as your sale. You were motivated by all of our other nontax benefits, but you do get the advantage now of having 100% of the dollars for the interest we bought by Note now available for reinvestment tax deferred.
When we purchase an asset you have 0 basis in for $1,000,000 and your sell for $1,000,000, the 20% federal tax of $200,000 and any state tax (e.g. 5% or 10%) is not paid. As a result, if you have $200,000 more to invest than $800,000 after tax, you have 25% more money to invest. If you have $300,000 more to invest than $700,000, you have 43% more dollars to invest.