The Internal Revenue Service defines an installment sale as one in which “you’ll receive at least one payment after the tax year in which the sale occurs.”
The Deferred Sales Trust vs. a Conventional Installment Sale
You likely already know that Section 453 of the Internal Revenue Code authorizes you to sell your highly appreciated asset by means of an installment sale, thereby allowing you to defer your capital gains taxes. You may also know that a Deferred Sales Trust is a special proprietary type of installment sale. But have you ever compared the two head-to-head to determine which offers you more advantages? If not, read on. You’re in for a very pleasant surprise!