Fifteen questions, answered in depth.
Each Deep Dive takes one issue the core chapters can only name and works it through at both reading levels, with examples, tables, and the authorities on each side.
Allocation & Character
What each dollar of price is, and whether it can ride the installment method.
The Goodwill-Designation Question
Can the seller note — or the SIS structured obligation — be tied specifically to Goodwill, rather than spread pro-rata across every asset sold? Fragmentation, §1060, Danielson, and drafting discipline.
Read article → Plain · PractitionerDeep DiveThe Covenant Question
Is covenant-not-to-compete consideration eligible for IRC §453 installment reporting — and why covenant consideration needs separate character, timing, and product review.
Read article → Plain · PractitionerDeep DiveThe Basis-Recovery Question
How basis is recovered in fixed-price and contingent installment sales, with examples and the applicable regulatory distinctions.
Read article → Plain · PractitionerDeep DiveEarnouts, Escrows & Price Adjustments
A fixed payment schedule is different from a price that depends on future events. Earnouts, holdbacks, indemnity escrows, and working-capital adjustments can change eligibility, timing, basis recovery, and what an assignment company will accept.
Read article → Plain · PractitionerParties & Entities
Who sold, who owes the tax, who may be paid, and what happens when the entity or the seller is gone.
Death, Beneficiaries & the Remaining Tax
Death does not generally erase the unrecognized gain in an installment obligation. Remaining payments follow the contract and applicable estate rules, and beneficiaries may inherit taxable income as well as payment rights.
Read article → Plain · PractitionerDeep DiveWho Is the Seller, Taxpayer & Payee?
The name receiving a check does not by itself determine who sold the asset or owes tax. Establish legal ownership, federal tax classification, and permitted payment rights before choosing an SIS payee.
Read article → Plain · PractitionerDeep DiveEntity Liquidations After an Installment Sale
Selling an entity’s assets and then dissolving the entity are separate tax events. Distributing an installment obligation can accelerate gain, and special liquidation provisions apply only when their requirements are met.
Read article → Plain · PractitionerTiming & Cost of Tax
When tax is due, what it costs to defer, and the rules that change the answer.
Large Sales: §453A Interest & the Pledge Rule
The annual interest charge and the borrowing rule are separate. The $5 million threshold belongs to the interest calculation; it does not create a general exemption for pledging smaller installment obligations.
Read article → Plain · PractitionerDeep DiveQualified Farmland: The §1062 Tax-Payment Option
Section 1062 lets an eligible taxpayer elect to pay specified federal income tax from a qualifying farmland sale in four annual installments. It spreads payment of that tax; an SIS generally spreads recognition of eligible gain. They solve different cash-flow problems.
Read article → Plain · PractitionerDeep DiveCash at Closing, Debt & the First-Year Tax Bill
A seller can often take part of an eligible sale price in cash and defer the remainder. But cash for a mortgage payoff, taxes, and living expenses must be planned alongside the installment calculation; a closing payment is not automatically all gain or all basis.
Read article → Plain · PractitionerDeep DiveOriginal Issue Discount (OID) in a Structured Installment Sale
Every §453 note is a debt instrument, and its interest is taxed under §§1272–1275 or §483 whether or not the documents mention it. How OID arises from the rate, the schedule, and the size of the note; how the answer changes for individuals, C corporations, pass-through entities, distributed notes, and farm and ranch sales; and the escape hatches and pre-closing planning that keep the SIS deferral intact.
Read article → Plain · PractitionerDeep DiveNIIT, Retirement Income & Tax-Bracket Planning
Spreading gain can reduce a one-year income spike, but it does not guarantee lower total tax. Compare the proposed payments with the household’s other income, deductions, benefits, and likely future tax years.
Read article → Plain · PractitionerDeep DiveAlternatives After the 2025 Tax Changes
Before committing to an SIS, check whether the transaction qualifies for an exclusion, another deferral rule, or a tax-payment election. Acquisition dates, sale dates, tax years, and election deadlines can change the answer.
Read article → Plain · PractitionerProtection & Geography
How payments are protected, and how state residence changes the tax.
Payment Protection: From Contract to Insolvency
Start with enforceable contracts and the actual legal entities. A large insurer’s brand, a financial-strength rating, and a state coverage table answer different questions and should never be treated as interchangeable guarantees.
Read article → Plain · PractitionerDeep DiveMoving States While Receiving Installments
Moving to a state with no individual income tax does not automatically remove tax on a prior sale. The original state may continue to tax source income, and the new state may tax residents on income recognized after the move.
Read article → Plain · PractitionerRead the core chapters.
Ten chapters, in reading order, from the history of the structure to the implementation checklist.