Short answer: a structured installment sale is a direct IRC Section 453 installment sale to your buyer, with payments funded by a highly rated life insurer. A Deferred Sales Trust routes the sale through a private trust that owes you a note. Both may defer capital gains tax; they differ on IRS standing, who holds your money, and cost.
1 min 48 sec. AI narration over Hans Goldstein's own visuals, checked against his books and pages. Education only, not tax, legal or financial advice.
you might wonder if a deferred sales trust is the same thing as a structured installment sale. Right. People mix those up all the time. Yeah, they really do. Right. Okay. So you have a property. You want to sell it. But you do not sell it directly to the end buyer. Right. You take a detour. Yeah. You sell your property to a private trust. You get a note in return, a piece of paper that says they will pay you over time. That is step one. The trust then turns around and sells the property to the real buyer. Okay. The real buyer pays cash. A trustee takes that money and invests it. You are paid on the note over time. So let us transition to the second tool instead. Let us see how a structured installment sale works. Okay. Lay it out for us. The buyer pays the full price at closing. This is the exact same as any cash sale. So no middlemen buying it first? No private trust in the middle, right. Escrow just takes the money. Escrow pays the old loan. Okay. Escrow pays the closing costs. And Escrow pays any cash you want right now. So if I want cash for a boat, I take it. But what happens to the rest of the money? Well, the buyer's duty to pay moves to an assignment company. An assignment company? Yeah. That company usually funds it with a fixed annuity. The annuity comes from a highly-rated, state-regulated life insurer. So the biggest trade-off for a structured sale is that the schedule is locked. It cannot be borrowed against. It cannot be cashed out. Payments depend on the assignment company and the insurer behind it. And there is no published IRS ruling on the assignment structure itself. A CPA or a tax attorney must review it. Comment CLOSE for the free Waterfall Strategy book, and the link is in the description.
Both promise to spread your capital gains tax over years instead of paying it all at once. But one runs your money through a private trust with a promoter-affiliated trustee; the other assigns the obligation to pay you to an assignment company funded by a fixed annuity from a highly rated life insurer. The difference shows up the day something goes wrong.
A Deferred Sales Trust sells your asset to a private trust, which resells it and owes you an installment note the trust itself administers. A Structured Installment Sale has the real buyer pay 100% cash at closing, then assigns the payment obligation to an assignment company, which funds it with a fixed annuity from a highly rated life insurer. You get paid over time either way; the question is who's actually holding your money in between.
Go deeper: deferred sales trust vs a direct installment sale, side by side on Big Sale Tax.
In a deferred sales trust, your deferred proceeds sit inside a trust, invested by a trustee who is frequently affiliated with the firm that sold you the strategy. In an installment sale, your deferred proceeds fund a regulated fixed annuity contract, owned by the assignment company and issued by a highly rated life insurer. Payments are an obligation of the assignment company and depend on it and on the insurer's claims-paying ability; the insurer's AM Best rating is the number to check. One is a private financial relationship with a promoter; the other is a regulated insurance contract.
Send me the sale price and rough basis and I'll email you the actual number within one business day, plus the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
The installment sale relies on IRC §453, the installment method, which is in the tax code (rewritten in 1980) and is used routinely by sellers who simply carry a note for a buyer. No IRS ruling specifically approves the installment sale assignment structure itself. The deferred sales trust borrows the same general concept but wraps it in a private trust structure that has no dedicated statute and has drawn IRS scrutiny over constructive receipt: whether the seller retained too much control to really call the money "deferred." Read how §453 works without the trust layer.
Deferred sales trust setup fees typically run 1.5%-2.5% of proceeds up front, plus an annual trustee fee of roughly 1%-2%. On a $2,500,000 sale that's $37,500-$62,500 at closing and $25,000-$50,000 a year for as long as the trust pays you out. An installment sale is priced inside the annuity contract the carrier issues; there's no separate trustee layer charging an ongoing management fee on top.
Control matters too: in an installment sale, once the sale closes you're the payee of a fixed, contractual payment stream; you don't direct investments, and there's nothing to second-guess about whether you kept too much say over the money. In a deferred sales trust, how much control the trustee genuinely exercises, versus how much the seller retains (formally or informally), is exactly the fact pattern an IRS exam would probe.
If your priority is the most conservative tax posture with a payment stream funded by a fixed annuity from a highly rated life insurer, an installment sale is generally the more defensible route. Business owners and property sellers with gains in the $500,000-$25,000,000 range are the typical fit. If you're comparing this to a 1031 exchange instead, see that comparison or read why 1031 traps so many sellers in replacement-property pressure.
Laid out this way, the two strategies solve the same problem (a big gain hitting one tax year), but they ask you to accept very different counterparties to get there.
No. They share the goal of deferring capital gains but use entirely different legal mechanics: An installment sale has no trust and no trustee; it assigns payments to a licensed party that funds a regulated annuity.
An installment sale relies on the §453 installment method (in the tax code, rewritten in 1980) and an assignment company as obligor, funded by a fixed annuity from a regulated, highly rated life insurer. No IRS ruling specifically approves the assignment structure, so have your own CPA or tax attorney review it. A deferred sales trust relies on a private trust structure with no dedicated statute, which is generally considered a less settled position. This is educational, not legal advice; talk to your own CPA or attorney.
Yes, that's the shared goal: spreading a large gain across years to keep more of it taxed at lower brackets instead of all at once at the top marginal rate plus NIIT.
Not after the fact; the structure has to be in place before your sale closes, ideally before you sign a purchase agreement. If you haven't sold yet, this is the moment to compare both.
Most fits are gains between roughly $500,000 and $25,000,000 from a business sale or investment property.
Plug in your sale price, basis, and state; the calculator runs your exact 2026 federal + California tax and shows what a Structured Installment Sale keeps in your pocket.
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Or talk it through: 213-414-2808 · Hans Goldstein · NPN 20602398. Educational only, not tax, legal, or accounting advice.
A plain-English guide for sellers: how a structured installment sale can help you net more after tax when you sell a business, practice, or property; the math, the alternatives, and how to know if your deal fits.
Drop your info: instant PDF download + within 1 business day Hans will email a preliminary read on which structure fits your deal. No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
📞 Hans Goldstein · 213-414-2808 · CA Insurance License #4273294 · Independent §453 specialist · Goldstein & Co. LLC
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Hans Goldstein is an Enrolled Agent, admitted to practice before the Internal Revenue Service. Not affiliated with or endorsed by the IRS. General education, not tax or legal advice for your situation.
