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Structured Sale or use of a M&A Reseller Experience
Old 04-18-2018, 05:27 PM   #1
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Happyras's Avatar
Join Date: Jun 2015
Location: Redmond
Posts: 358
Structured Sale or use of a M&A Reseller Experience

I am hoping there are few out there with insight on selling their own Sub S corp with tax efficiency. My question;
Has anyone had good or bad experience in using a third party M&A reseller for liquidation of their business, or experience using a Structured Sale such as the Allstate Life Structure Sale Annuity? If not, did you find an installment sale went well. This is for selling a PS corp filing under Fed Sub S.

I did some preliminary calcs and realized taking the lump sum at 20% cap gains was not the end to the pain. The carryover of the 3.8% Net Investment Income tax and AMT really pushes the sale back to an installment contract to avoid excessive tax. My calcs put the net cost at 30% to taxes even though its long term gain. However I see the above options provide the same benefits, with lower risk for buyer default as well as implied participation in the ongoing business. I just do not know the cost (% of sale) lost in using either method to a third party. An installment method lowers the tax to 20%, still high but better than 30% in one year. Could be the AMT in 2018 is less, but not as much a factor as the 3.8% NIIT.

I am considering selling other properties as well as the business to simplify life, after all, I thought I retired but now spend too much time and pain dealing with them between trips abroad.

Any help would be appreciated, PM me if you wish. I am just looking for pros and cons from real experience.

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