SIS Calculator Pro — California Cash vs Structured Installment Sale, Every Number a CPA Cares About

Step 1 of 1

Your deal & tax picture

Pick your asset type, then enter your deal. Everything else lives in the advanced accordion — only fill what applies.

What are you selling?

Real estate:§121 exclusion + §1250 depreciation recapture + city transfer tax applicable.

Gross sale price

Contract price (before recapture, mortgage payoff, carve-out)

Adjusted cost basis

Purchase price + capital improvements − accumulated depreciation

Filing status

Your age

Used for life expectancy + IRMAA (age 63+)

Spouse age (if MFJ)

Both spouses' MAGI counts toward IRMAA

Life expectancy

Drives heir/survivor math. Default 90 for healthy 65-yo.

⚡ Post-sale ordinary income (right now, excl. the gain)

Stacks under the gain in every bracket calc. Include W-2 / partnership K-1 / pension / Social Security taxable portion / rentals / dividends. Higher income = SIS saves more (no bracket compression headroom on cash side).

📅 Income variation — planning to retire / step down?

Income AFTER retirement

Years until retirement

Default = same income forever (0 yrs to retirement). Set to e.g. "$80K · 5 yrs" to model: for the first 5 years the SIS payments stack on $150K; from year 6 onward they stack on $80K — usually drops the effective rate by 8–12 points and may eliminate IRMAA entirely.

Capital loss carryforwards

From Schedule D line 14 / 16. Offsets gain dollar-for-dollar before tax applies.

CA resident at closing?

Non-residents reconcile on year-end return, but the Year-1 withholding eats liquidity.

Advanced inputs §121 · depreciation · prior 1031 · city tax

§121 primary residence exclusion

$250K single / $500K MFJ if lived there 2 of last 5 yrs. $0 for investment property.

Depreciation recapture (§1250)

Rental/commercial real estate only. Taxed Year-1 at 25% federal + CA marginal — cannot be deferred by SIS.

Mortgage payoff at closing

Reduces SIS premium (cash leaves escrow to lender).

Cash carve-out at closing

Cash to hand for tax bill, debt, emergency. Reduces SIS premium. Useful to keep SIS under $5M to avoid §453A.

💰 Allocate the carve-out across buckets (HYSA + MYGA) +

Split your carve-out across two buckets: HYSA (highly liquid, lower yield) and MYGA (3-7yr lock, higher yield). Combined annual income feeds your year-1 cash flow alongside SIS payments.

HYSA % of carve

HYSA yield %

MYGA % of carve

MYGA yield %

Enter a cash carve-out above to see per-bucket allocation.

HYSA interest is ordinary income each year. MYGA interest is tax-deferred until withdrawal. Both stack on top of SIS payments.

Property city (transfer tax)

City + county documentary transfer taxes hit Year 1 regardless of SIS.

Prior §1031 carryover basis

If you 1031'd into this property, your real basis is the carried-over basis from the original property.

Selling expenses (realtor / escrow / title)

~5–6% on residential, ~3–5% on commercial. Reduces gross gain dollar-for-dollar + reduces SIS premium.

Other capital gains this year

Stock, business interest, other property sales in the SAME year. Stacks under this gain in the bracket calc — pushes you higher faster.

Deduction

Reduces taxable income → affects the bracket-stack baseline for the gain tax.

Holding period

Short-termdestroys the SIS benefit — gain taxes at ordinary rates with no bracket compression possible. Hold >1 year before selling whenever you can.

Capital improvements (added to basis)

Renovations, additions, capital expenses you put into the property. Added to basis = reduces gain.

§121 — Years lived in (of last 5)

2-of-5-year test. Disables §121 exclusion if you can't claim it.

§199A QBI deduction (if applicable)

20% pass-through deduction for qualified business income. Reduces ordinary income for bracket-stacking.

HSA contribution this year

2026 limits: $4,300 self / $8,550 family / +$1,000 age 55+. Reduces MAGI = lower NIIT + IRMAA.

Charitable contribution before sale

Charitable bunching strategy.Donate appreciated stock or cash before the sale year — deducts up to 30% of AGI from gain (cash) or 30% (stock). Common play for high-net-worth sellers.

Mid-stream state change (moving during SIS term?)

Big leverage.If you move to a no-tax state mid-SIS, future payments escape the 13.3% CA piece. The earlier you move, the bigger the win.

SIS structure

How long & which buckets

Auto-optimize finds the term that nets the most after tax + IRMAA. Override by dragging the slider. Yield auto-adjusts to current carrier market by term.

SIS payment duration 20 yrs

510203040 yrs

SIS carrier yield · AUTO from duration · conservative 4.0%

3.0%3.3%
5yr3.7%
10yr4.0%
20yr4.3%
30yr+

⚠ Yield ≠ taxed yield — what you actually keep

Gross (carrier credit)

4.7%

After tax (real-world net)

3.2%

Why the gap:Each SIS payment splits into basis recovery (tax-free), recognized gain (LTCG ~17% blended), and imputed interest (ORDINARY income — your marginal rate). The interest portion of a 4.7% carrier credit gets taxed at ~33-41% combined, dragging the realized yield closer to 3% on that piece.

Conservative ballpark.Approximate 2026 structured-settlement market rates by duration: ~3.8% @ 5yr, 4.5% @ 10yr, 4.7% @ 15yr, 4.8% @ 20yr, 5.0% @ 30yr+. Educational only — not a quote.Actual rate locked at placement by the carrier-appointed structured-settlement specialist.

📅 SIS is term-certain.Payments are scheduled for the full term regardless of life events. If you die during the term, remaining payments transfer to your designated beneficiary(spouse, kids, trust, charity) at the same dollar amount, on the same dates, until the term ends. The carrier doesn't keep anything. Beneficiary inherits as §691 Income in Respect of a Decedent — see the §691 IRD note in the CPA deep-dive below.

SIS COLA · annual payment growth 0.0%/yr

0%1%2%3%

Carriers offer 0–3% COLA.Lower Year-1 payment in exchange for annual growth — useful when ordinary income will drop in later years (e.g., post-retirement). 2-3% COLA roughly matches long-run inflation.

Defer income start · still working, want income later? 0 yrs

051015 yrs

Carrier compounds at the credit rate during the deferral.Useful if you’re still in peak earning years and want the SIS to back-fill retirement. Each year of deferral grows the eventual payment by ~5% on top of the credit-rate compound.

If you take the cash · what's the realistic alternative?

10-yr Treasury vs SIS — the tax-treatment-fair comparison.

Treasuries are the most apples-to-apples comparison to a SIS — both are A/AAA government- or A-rated-carrier-backed, both pay scheduled interest. But Treasury interest is taxed every year as ordinary income. SIS imputed interest is also taxed ordinary, but the gain portion gets LTCG treatment and the basis recovery is tax-free.

10-yr Treasury

~4.0%

gross · historical avg ~3.2% (2000-2025)

After-tax:~2.6%
Interest taxed annually at fed marg ~33% + CA 9.3% = ~42% combined. State-tax-exempt for federal Treasuries only — full CA tax still applies.

5-yr MYGA

~4.0%

historical avg ~3.5% (2010-2024)

Tax-deferredduring accumulation. At end of 5-yr term you either 1035-exchange to a new MYGA (defer again) or take cash and pay ordinary income tax on ALL accumulated gain that year. 5-yr re-shop risk: today's rate ≠ tomorrow's.

SIS (your structure)

4.0%

locked at execution for 20 years

No re-shop, no rate-reset risk.3-way tax split per §1.453-2: basis recovery (tax-free) + LTCG on gain (~17% blended) + ordinary on imputed interest. Bracket-compresses the gain. Compounds on pre-tax base.

📊 Why this comparison matters:Treasuries and MYGAs let you keep the cash, but force you to re-invest at unknown future rates (5-10 yrs). SIS locks today's rate for the full term. Today's MYGA at 4-5% is historically high — by 2030 the average drops back closer to 3-3.5%. The SIS rate doesn't change.

The answer

Same deal. Same yield assumption. Different tax exit.Both numbers are after-tax, after-yield, after 25 years.

Cash sale path

—

After Year-1 tax bill of $— · reinvested at 5.0% taxed yearly

SIS path

—

SIS payments at 4.7% carrier rate, after-tax pieces also reinvested

SIS keeps you ahead by

—

SIS pays you ~—/month after tax for 25 years — and your money compounds on a larger pre-tax base because the IRS doesn't get its cut in Year 1.

Where the win comes from · for CPAs

Tax-only floor · 0% yield

(no investing assumed either side)

+—

Bulletproof math — pure tax compression

With 4% yield both sides

(realistic — money keeps working)

+—

tax + compounding on pre-tax base

SIS wins both ways.The 0% yield number is the floor a CPA can verify against IRS publication tables. The yield boost (gap between the two numbers) is — — that's compounding on a larger pre-tax base.

—

🤝 The negotiating angle most advisors miss

You can offer the buyer a price concession and still beat cash.

The SIS doesn't ask the buyer to take risk — the carrier funds the obligation at closing as a lump sum from escrow. The buyer just signs one extra assignment-addendum document. That cooperation has value, and you can pay for it.

Max concession you could offer

—

Theoretical ceiling — below this, SIS still nets more than cash

Practical recommendation

—

~1–3% of price · enough to close a cooperative buyer

How to use this:If your property is listed at $2M, you can tell a buyer "I’ll take $1.95M instead of $2M if you’ll sign the SIS assignment" — that’s real money to them for one signature. The buyer’s lender funds normally, the wire splits at escrow, the buyer walks away with no ongoing obligation. The illustration shows your net after-tax still exceeds the full-price cash scenario.

💰 SIS annual payment · gross vs net

What hits your bank account each year

Gross / yr

—

—/mo before tax

− Tax / yr

—

Fed LTCG + ord int + CA + IRMAA

= Net / yr

—

—/mo IN YOUR POCKET

Post-sale annual income · cash side

—

Interest only on post-tax lump

Post-sale annual income · SIS side

—

SIS payment, after tax

SIS pays you ~—× more per year than living off the after-tax cash lump — without ever touching principal.

For CPAs & attorneys 📊 Per-year tax decomposition · IRMAA · IRR · real PV · break-even yield · year-by-year table

Cash sale · Year-1 tax bill

Lump-sum stack

Gross sale price—

Cost basis—

§121 exclusion—

Taxable gain—

Federal LTCG (bracket stacking)—

NIIT 3.8%—

CA income tax (up to 13.3%)—

CA MHST 1% (above $1M)—

§1250 depreciation recapture—

City transfer tax—

IRMAA (2-yr lookback)—

Effective rate on gain—

Net to seller (Year 1)—

SIS · 25-yr structure

Per-year decomposition

SIS premium (structured)—

Annual payment (gross)—

⤷ basis recovery (tax-free)—

⤷ gain recognized (LTCG)—

⤷ imputed interest (ordinary)—

Tax per year (LTCG + ord + CA)—

Net per year (after tax)—

§453A interest charge (≥$5M premium)—

Total tax over term—

Effective rate on gain—

Net to seller (over term)—

Medicare IRMAA impact

—

After-tax IRR · Cash

—

over 25 years

After-tax IRR · SIS

—

over 25 years

Break-even cash yield

—

needed to match SIS net

Real PV @ 3% inflation

—

SIS, today's dollars

🔬 Live math breakdown — fact-check every step

updates as you change inputs

Every calculation, in order, with the actual values being used. CPAs can verify each step against their software. Color legend: gain math · cash-side tax · SIS structure · SIS per-year · compounding

① GAIN CALC

            Amount realized = Sale − Selling expenses

              = $2,000,000 − $0 = $2,000,000

            Adjusted basis = Basis + Improvements

              = $400,000 + $0 = $400,000

            Gross gain = Realized − AdjBasis = $1,600,000

            Less: §121 exclusion = $0 · §1202 QSBS = $0 · Loss carry = $0

            = TAXABLE GAIN: $1,600,000
          
② CASH-SIDE YEAR-1 TAX STACK

            Ord stack baseline = Income − Deductions − QBI − HSA − Charitable

              = $150,000 − $30,000 = $120,000

            + Other gains this yr = $0 → stack starts at $120,000

            Fed LTCG (bracket stacking): stack from $120K to $1.72M

              = $X

            NIIT 3.8% on excess over $250K: $X

            CA tax (marginal increment): $X

            CA MHST 1% over $1M MAGI: $X

            §1250 dep recapture (25% fed + 9.3% CA): $0

            §1245 recapture (ord rates): $0

            City transfer tax: $0

            IRMAA (2-yr lookback, both spouses): $X

            = TOTAL Year-1 TAX: $X

            Cash net Y1 = Sale − Selling − Tax − CA-NonRes-WH = $X
          
③ SIS STRUCTURE

            SIS premium = Sale − SellingExp − Mortgage − DepRecapTax − §1245Tax − Carve

              = $X

            Deferred-start compound: premium × (1+r)^0 = $X

            PMT formula: P × r / (1 − (1+r)−n) (or geometric if COLA ≠ 0)

              P = $X · r = 4.0% · n = 20 · COLA = 0%

            Annual payment Year 1 = $X

            Gross profit ratio (GPR) = Gain ÷ Sale = 80.0%
          
④ SIS PER-YEAR DECOMPOSITION (avg over 20 yrs)

            Payment splits 3 ways per §1.453-2:

              ⤷ Basis recovery (tax-free) = Principal × (1 − GPR) = $X/yr

              ⤷ Gain recognized (LTCG) = Principal × GPR = $X/yr

              ⤷ Imputed interest (ordinary §483) = avg = $X/yr

            Per-year tax stack:

              Fed LTCG on gain/yr stacked on (income+int): $X

              NIIT 3.8% (if MAGI > threshold): $X

              CA tax (marginal): $X

              Interest taxed at ordinary marg rate: $X

              IRMAA each year (if 63+ Medicare): $X

            = Tax per year: $X

            = Net per year: $X
          
⑤ APPLES-TO-APPLES COMPOUNDING (both sides @ 4%)

            After-tax yield = Yield × (1 − marginal tax) = 2.34%

            Cash FV = NetY1 × (1 + AfterTaxYield)n

              = $X × 1.X = $X

            SIS FV = AnnualNet × [(1+AT_Y)n − 1] / AT_Y (future-value annuity)

              = $X × XX = $X

            Δ (SIS advantage) = SIS FV − Cash FV = $X
          
            ⚠ What this math does factor in:tax-deferral value (gain recognized per-year, not Year 1), bracket compression on cash side, IRMAA savings, full pre-tax base compounding on SIS side.

            ⚠ What this math does NOT factor in:(1) MYGA 5-year re-shop risk — at every 5-yr renewal you either 1035-exchange or face a tax bill on accumulated gain that year; (2) today's MYGA rate isn't tomorrow's — if rates drop in 5 years your renewal could be 2-3% (cash side suffers; SIS already locked at today's rate for the FULL term); (3) actual deferral economics depend on holding period and re-investment behavior; (4) AMT, state-rate changes, IRMAA bracket adjustments over time, life-expectancy variance.

            📊 Historical MYGA reference:5-yr MYGA rates averaged ~2.5-3.5% from 2010-2022, spiked to 5-5.7% in 2023-2024 with Fed hikes. Long-term average ~3.5%.The 4% default here is conservative-to-realistic. Real carrier quotes today often exceed it — but the SIS calc locks at execution, not in 5 years.

⚠ §691 IRD — what if you die during the SIS term?

Remaining SIS payments transfer to your heirs but are taxed as Income in Respect of a Decedent (IRD) under IRC §691 — there is NO step-up basis. Heirs continue to receive the per-year payment AND pay tax on it (mostly ordinary income for the interest portion, LTCG for the gain portion).

Mitigation strategies:(1) GUL/IUL wealth-replacement policy funded out of SIS payments (death benefit is §101 tax-free); (2) shorter SIS term if life expectancy is concerning; (3) joint-life SIS (payments continue uninterrupted after first spouse dies). Discuss with your estate attorney + tax counsel.

Year-by-year SIS schedule

Yr	Payment	Basis recov	Gain	Interest	Tax	Net

Optional add-on · legacy / heirs 🛡️ Add GUL · S-GUL · IUL — wealth-replacement / inheritance equalization

A life insurance policy funded out of the cash carve-out (or annual SIS income) creates a tax-free death benefit under §101 — useful for heir wealth replacement, charitable intent layering, or estate-tax dilution. Premium estimate at your age + health below.

Target death benefit

Policy type

Insured sex

Health rating

Estimated annual premium

—

Total premium outlay

—

Net to heirs after DB

—

Ballpark estimate based on 2026 market rates for indicated age + health. Real carrier quote requires full underwriting (medical exam, APS, MIB). IUL illustrated values depend on crediting strategy and policy charges — the guaranteed DB shown assumes no-lapse-guarantee rider in force. Compare all policy types & the cost-of-insurance curve →

Considering 1031 instead?1031 defers gain into the next property; SIS spreads recognition over time. 1031 wins if you want to keep owning real estate. SIS wins if you want liquidity, retirement income, or are tired of being a landlord. Full SIS vs 1031 comparison →

⚠ Educational tool only · not a quote · not a recommendation

SIS structures are placed by carrier-appointed structured-settlement specialists with A or A+ rated (A.M. Best) life-insurance carriers. This calculator does not quote any specific carrier rate, product, or offer.Actual rates, products, and contract terms are quoted by the placing structured-settlement specialist at the time of placement and vary by carrier, duration, deal size, market conditions, and the seller's specific facts. Annuity guarantees subject to claims-paying ability of the issuing carrier. California Life & Health Insurance Guarantee Association coverage applies per CLHIGA limits. How the SIS assignment works →

Want this analysis on your specific deal?

30-minute call with Hans. Bring your CPA. No pitch — he'll run your real numbers + tell you honestly whether SIS fits. Or have the calculator results emailed as a PDF you can forward to your CPA.

📞 213-414-2808 — Talk to Hans

Get the full analysis as an email — every input, every computed number, year-by-year SIS schedule, tax breakdown, and a link your CPA can open to see this exact scenario in the calculator.

Your name

Your email

Your phone (optional)

CPA email (optional · CC them)

Anything specific?

⚠ Educational analysis only · NOT a quote · NOT advice. Numbers are illustrative ballparks built on 2026 federal LTCG + NIIT + California marginal + MHST + IRMAA tier modeling and approximate carrier-yield ranges. Actual SIS rates are quoted only by carrier-appointed structured-settlement specialists at placement and depend on deal facts, carrier, market conditions, and deal size. Annuity guarantees subject to claims-paying ability of the issuing carrier. California Life & Health Insurance Guarantee Association coverage applies per CLHIGA limits. Hans Goldstein is a CA-licensed insurance & annuity producer (NPN 20602398 · CA Lic 4445478); SIS placement is co-broker referred. Consult your CPA and tax counsel before acting.

📋 See how we crunched the numbers — plain-English walkthrough

1. Your gain

Sale price minus what you originally paid (plus improvements, minus depreciation) minus any §121 primary-residence exclusion you qualify for = taxable gain.

Sale $2M − Basis $400K = Gain $1.6M

2. The cash-sale tax stack (Year 1)

If you take cash, all of that gain hits in one year. The IRS stacks it on top of your existing income, and you pay through every bracket it touches:

Federal LTCG: — · NIIT (3.8% on investment income over threshold): — · CA tax (up to 13.3%): — · CA MHST (1% above $1M): —

Plus any depreciation recapture (locked at 25% federal + CA marginal) and city transfer taxes (LA ULA, SF Prop I, etc.) that hit at closing regardless of structure.

3. The SIS path — bracket compression

With SIS, the gain is recognized year by year instead of all in Year 1. Each year you only owe tax on that year's slice of gain — which stays inside lower brackets:

Gain per year: — (instead of all $1.6M in Year 1) → smaller bracket → smaller tax → repeat 25 times.

4. Each annual SIS payment splits 3 ways

The carrier sends you a check every month. Each one is actually three different tax buckets rolled into one:

Basis recovery (tax-free, you're getting your own original cost back): —/yr
Gain recognized (taxed at LTCG): —/yr
Imputed interest (taxed at ordinary income): —/yr

5. The IRMAA difference

This is the part most calculators miss. Medicare looks at your MAGI from 2 years ago to decide your Part B/D surcharges. A big cash sale today = max IRMAA tier in 2 years (~$13,872/yr extra for both spouses). SIS keeps each year's MAGI under the threshold = no surcharge.

—

6. Apples-to-apples compounding

For the headline comparison, we assume both sides earn the same yield over the term. Cash side: you pay tax in Year 1, then reinvest what's left at the blended yield (taxed annually as ordinary income). SIS side: smaller tax bills each year + the principal compounds inside the annuity at the carrier rate before tax.

Cash FV = —
SIS FV = —
Difference: — more with SIS

Why SIS wins both ways:Even at zero assumed yield (pure tax savings), SIS still beats cash because of bracket compression. Add realistic 4–5% carrier yield and the gap widens — because SIS compounds on the full pre-tax sale price, not the after-tax leftover.

Honesty section ⚠ What this calculator does NOT model — talk to your CPA about these

This calc handles the 95% case (real estate, simple business asset sales, simple stock sales). The following situations need a CPA / attorney conversation — Hans can refer to specialists:

Hot assets / §751 carve-out — partnership sales have an ordinary-income portion (inventory, depreciation recapture, unrealized receivables) that cannot be SIS’d. Real partnership exit math requires entity-level analysis.
Earn-out / contingent payments — IRS treats these under Rev. Rul. 70-498 (basis recovery first) which timing differs from a straight installment sale. Common in business sales.
§453(g) related-party rules — selling to a related party who then resells within 2 years accelerates all deferred gain back to Year 1.
Opportunity Zone (§1400Z) — alternative to SIS: reinvest capital gain in QOZ fund within 180 days for 5–7 yr deferral + 10-yr appreciation exclusion. May beat SIS for sellers wanting upside vs guaranteed income.
AMT (Alternative Minimum Tax) — LTCG preserves its rate under AMT, but the AMT exemption phases out at high incomes. Material for top-bracket sellers.
§338(h)(10) election — for stock sales of S-corps, lets buyer treat as asset sale for tax purposes. Material allocation differences.
§754 election (partnerships) — inside-basis step-up at partner sale or death.
SCIN (self-cancelling installment note) — alternative to SIS for sellers with shorter life expectancy. Note cancels at death, no estate inclusion.
Private annuity — life-contingent payments instead of fixed term. Different IRS treatment under Rev. Rul. 2006-39.
§721 UPREIT exchange — contribute property to a REIT operating partnership for OP units (tax-deferred). Alternative exit for institutional real estate.
28% collectibles rate — art, gold, coins taxed at max 28% federal LTCG (not 20%). Apply manually if asset-type = "Other / Collectibles".
Mixed-use property — partial §121 + §1031 + business portion all in one sale requires allocation.
Trust / estate sales — trust-level tax brackets compress fast (top bracket at $14K!). Material for irrevocable-trust-owned assets.
§453A nuance on >$5M premiums — calc approximates the interest charge; actual calc per Reg. §15A.453-1(c)(3)(i) requires year-by-year deferred-tax computation.

If any of these apply to your deal,get a 30-min call with Hans — he’ll either run the right math himself or refer to a structured-settlement specialist / tax attorney who can.

For math nerds

🧮 The math we are mathing — full formula derivation

Every variable used by this calculator. All brackets are 2026 federal + California. Notation matches what a CPA or tax attorney would recognize. If a number doesn't tie out to your software, walk through the chain below and tell us which step is off — we’ll explain.

1. Gain & gross profit ratio (IRC §453, Reg. §1.453-2)

G_gross = SalePrice − (Basis + Improvements − Depreciation) # cost basis is adjusted
G_taxable = G_gross − §121_excl # exclusion only on primary residence
GPR = G_taxable ÷ SalePrice # gross profit ratio, used to split each SIS payment

2. Federal LTCG bracket stacking (IRC §1(h))

# 2026 MFJ brackets:
Bracket[0] = [0, $96,700] @ 0%
Bracket[1] = ($96,700, $600,050] @ 15%
Bracket[2] = ($600,050, ∞) @ 20%

# Single: $48,350 / $533,400 ceilings · HOH: $64,750 / $566,700 ceilings

# Stack the gain on top of ordinary income — the bracket your gain falls in depends on your other income:
stackStart = OrdinaryIncome
stackEnd = OrdinaryIncome + G_taxable
Fed_LTCG = Σ_i [max(0, min(stackEnd, top_i) − max(stackStart, bot_i))] × rate_i

3. Net Investment Income Tax (IRC §1411 · 3.8%)

Threshold = $250,000 (MFJ) | $200,000 (Single, HOH)
MAGI = OrdinaryIncome + G_taxable # simplified; actual MAGI adds back excluded foreign earned income, etc.
Excess = max(0, MAGI − Threshold)
NIIT = min(G_taxable, Excess) × 0.038

4. California income tax (R&T Code §17041)

# CA taxes LTCG as ordinary income through 9 progressive brackets up to 12.3% top + 1% MHST = 13.3% effective top rate
# 2026 MFJ brackets (approximate, indexed yearly):
1.0% [0, $21,512] · 2.0% [$21,513, $51,000] · 4.0% [$51,001, $80,490] · 6.0% [$80,491, $111,732] ·
8.0% [$111,733, $141,212] · 9.3% [$141,213, $721,318] · 10.3% [$721,319, $865,574] · 11.3% [$865,575, $1,442,628] · 12.3% [$1,442,629, ∞]

CA_tax = bracketTax(OrdIncome + G_taxable) − bracketTax(OrdIncome) # marginal increment

5. CA Mental Health Services Tax (R&T §17043 · 1%)

MHST = max(0, (OrdIncome + G_taxable) − $1,000,000) × 0.01

6. §1250 depreciation recapture (max 25% fed)

Recap_tax = DepreciationTaken × (0.25 + CA_marginal) # cannot be deferred via §453
# Hits Year 1 even in SIS scenario — included in cash carve-out sizing

7. SIS amortizing annuity (PMT formula)

SISpremium = SalePrice − Mortgage − Recap_tax − CashCarveout

PMT = SISpremium × r ÷ (1 − (1 + r)⁻ⁿ)

where:
r = annual carrier credit rate (~3.8% @ 5yr · ~5.0% @ 30yr+ in 2026 market)
n = term in years

TotalGross = PMT × n
TotalInterest = TotalGross − SISpremium

8. Per-year §453 gain recognition (Reg. §1.453-2)

# Each payment splits 3 ways — the IRS specifies the formula:
Basis_yr = PMT × (1 − GPR) # tax-free basis recovery
Gain_yr = PMT × GPR # taxed at LTCG, stacked on current income
Interest_yr = TotalInterest ÷ n # §483 imputed interest, taxed ordinary; declines per-year in reality but avg here

Tax_yr = Fed_LTCG(Gain_yr, OrdIncome + Interest_yr) + NIIT_yr + CA_tax,yr + MHST_yr + Interest_yr × OrdMargRate
Net_yr = PMT − Tax_yr

9. §453A interest charge (premium > $5M)

Excess = max(0, SISpremium − $5,000,000)
ExcessRatio = Excess ÷ SISpremium
AFR_underpay ≈ 0.07 # 2026 Q1 underpayment rate
§453A_charge,yr = ExcessRatio × DeferredGain × AFR_underpay # annual, compounded

10. Medicare IRMAA (42 CFR §408.20 · 2-yr lookback)

# 2026 MFJ tiers (using 2024 MAGI for 2026 IRMAA · indexed yearly):
Tier 1: MAGI ≤ $206,000 → standard premium
Tier 2: ≤ $258,000 → +$74.20 Part B + $12.90 Part D per spouse/month
Tier 3: ≤ $322,000 → +$185.50 + $33.30
Tier 4: ≤ $386,000 → +$296.90 + $53.80
Tier 5: ≤ $750,000 → +$408.20 + $74.20
Tier 6: > $750,000 → +$487.00 + $91.00

IRMAA_annual = (Part B + Part D surcharge per spouse) × (1 or 2 spouses on Medicare) × 12

11. After-tax compounding (FV formulas)

# Both sides assumed to earn yield y, taxed at marginal rate t:
AfterTaxYield = y × (1 − t)

# Cash side — pay tax Year 1, reinvest net for n yrs:
Cash_FV = NetToCash × (1 + AfterTaxYield)ⁿ

# SIS side — each year's after-tax payment reinvested (future-value annuity):
SIS_FV = AnnualNet × [(1 + AfterTaxYield)ⁿ − 1] ÷ AfterTaxYield

12. After-tax IRR (numerical solve)

# Cash flows: Year 0 = −NetToCash + annual interest withdrawals; Year n = final lump
# Solve for IRR using bisection on:
Σ_t=0..n CF_t ÷ (1 + IRR)^t = 0

# Same for SIS side — cash flows are annual after-tax SIS payments.

13. Break-even cash yield (what cash needs to earn to match SIS)

# Solve for y_BE in:
NetToCash × y_BE(1 − t) × n ÷ [1 − (1 + y_BE(1 − t))⁻ⁿ] = SIS_net

# Bisection method, 80 iterations, 0.01% ≤ y_BE ≤ 50%

14. Real PV (inflation-adjusted, 3% default)

# Today's-dollar value of nominal cash flows:
PV_real = Σ_t=1..n Net_yr ÷ (1 + 0.03)^t

15. City + county transfer taxes (auto by jurisdiction)

# Measure ULA (Los Angeles City, 2023):
if SalePrice ≥ $5,150,000 and < $10,300,000: CityTax = SalePrice × 0.04
if SalePrice ≥ $10,300,000: CityTax = SalePrice × 0.055

# Prop I (San Francisco): tiered up to 6% above $25M
# Berkeley/Oakland/Culver/Santa Monica: tiered per ordinance
# Hits Year 1 regardless of SIS — included in cash side, not deferrable

Statutory + regulatory citations:IRC §1(h) Federal LTCG brackets · §453 installment sales · §453A interest charge · §483 imputed interest · §1411 NIIT · §121 primary-residence exclusion · §1031 like-kind exchange · §1250 depreciation recapture · §664 charitable remainder trust (out of scope this calc) · Reg. §1.453-2 gross profit ratio · CA R&T Code §17041 income brackets · CA R&T §17043 MHST · 42 CFR §408.20 IRMAA · 26 CFR §1.483-1 imputed interest. All brackets 2026. CA brackets indexed annually by Franchise Tax Board.

Source code transparency:This calculator's JavaScript is inline on this page — view-source (Ctrl-U) to audit every formula, every constant. No external dependencies, no API calls, no data sent to a server unless you submit the email-PDF form.

Calculator transparency

Exactly what's modeled — and what needs a 20-min consult.

This calculator handles the core sale-side tax math at high fidelity. Edge cases below are where deeper planning happens.

✓ What this calculator models

Federal LTCG progressive 0/15/20% with stacking · IRC §1(h)
California progressive 1–13.3% with bracket stacking · CA R&TC §17041
CA MHST 1% over $1M MAGI · CA R&TC §17043
NIIT 3.8% on investment income · IRC §1411
§121 home exclusion $500K MFJ / $250K Single
§1250 depreciation recapture 25% federal + CA
§1245 ordinary recapture (business equipment)
§1202 QSBS exclusion (founder stock)
§453A interest charge (>$5M outstanding) · IRC §453A(c)
City transfer tax (SF, LA, Berkeley, Oakland)
IRMAA Medicare surcharge 2-yr lookback
SIS amortization with declining-balance interest

⚡ What needs a 20-min consult

Roth conversion ladder during your pre-RMD years — multi-year tool needed
RMD strategy (your IRA + your age curve)
Social Security taxation (0/50/85% regime shifts year-by-year)
IRD treatment at death — heirs inherit SIS income-tax obligation
Multi-state source taxation if you leave CA
Carryforward NOLs / loss harvesting
Trust structures — GRAT, IDGT, ILIT
CRT comparison — Charitable Remainder Trust as alternative
Estate tax exposure ($13.6M federal exemption, sunsets ~$6M)
QCD strategy after 70.5 (charitable + RMD satisfaction)
K-1 / lumpy income events in specific future years
Future tax law changes (TCJA sunset, RMD age, IRMAA recalibration)

Need the multi-year view with RMDs + Roth ladder?

This calc handles the one-year sale-side math. For lifetime optimization across SIS + RMD + Roth + Medicare, use the optimizer.

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The math your CPA
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Your deal & tax picture

How long & which buckets

10-yr Treasury vs SIS — the tax-treatment-fair comparison.

You can offer the buyer a price concession and still beat cash.

What hits your bank account each year

Lump-sum stack

Per-year decomposition

Want this analysis on your specific deal?

1. Your gain

2. The cash-sale tax stack (Year 1)

3. The SIS path — bracket compression

4. Each annual SIS payment splits 3 ways

5. The IRMAA difference

6. Apples-to-apples compounding

1. Gain & gross profit ratio (IRC §453, Reg. §1.453-2)

2. Federal LTCG bracket stacking (IRC §1(h))

3. Net Investment Income Tax (IRC §1411 · 3.8%)

4. California income tax (R&T Code §17041)

5. CA Mental Health Services Tax (R&T §17043 · 1%)

6. §1250 depreciation recapture (max 25% fed)

7. SIS amortizing annuity (PMT formula)

8. Per-year §453 gain recognition (Reg. §1.453-2)

9. §453A interest charge (premium > $5M)

10. Medicare IRMAA (42 CFR §408.20 · 2-yr lookback)

11. After-tax compounding (FV formulas)

12. After-tax IRR (numerical solve)

13. Break-even cash yield (what cash needs to earn to match SIS)

14. Real PV (inflation-adjusted, 3% default)

15. City + county transfer taxes (auto by jurisdiction)

Exactly what's modeled — and what needs a 20-min consult.

Save this analysis · Email it to yourself or your CPA

Sent from [email protected]

Each calculator answers a different question. Pick the one that fits yours.

The math your CPAwill actually trust.

Your deal & tax picture

How long & which buckets

10-yr Treasury vs SIS — the tax-treatment-fair comparison.

You can offer the buyer a price concession and still beat cash.

What hits your bank account each year

Lump-sum stack

Per-year decomposition

Want this analysis on your specific deal?

1. Your gain

2. The cash-sale tax stack (Year 1)

3. The SIS path — bracket compression

4. Each annual SIS payment splits 3 ways

5. The IRMAA difference

6. Apples-to-apples compounding

1. Gain & gross profit ratio (IRC §453, Reg. §1.453-2)

2. Federal LTCG bracket stacking (IRC §1(h))

3. Net Investment Income Tax (IRC §1411 · 3.8%)

4. California income tax (R&T Code §17041)

5. CA Mental Health Services Tax (R&T §17043 · 1%)

6. §1250 depreciation recapture (max 25% fed)

7. SIS amortizing annuity (PMT formula)

8. Per-year §453 gain recognition (Reg. §1.453-2)

9. §453A interest charge (premium > $5M)

10. Medicare IRMAA (42 CFR §408.20 · 2-yr lookback)

11. After-tax compounding (FV formulas)

12. After-tax IRR (numerical solve)

13. Break-even cash yield (what cash needs to earn to match SIS)

14. Real PV (inflation-adjusted, 3% default)

15. City + county transfer taxes (auto by jurisdiction)

Exactly what's modeled — and what needs a 20-min consult.

Save this analysis · Email it to yourself or your CPA

Sent from [email protected]

Each calculator answers a different question. Pick the one that fits yours.

The math your CPA
will actually trust.