Is a SIS legal and IRS-compliant?

Yes. The Structured Installment Sale is fully compliant with IRS Code Section 453 and IRS Publication 537. The key requirements are: (1) no constructive receipt of funds — proceeds go directly from escrow to the trust, (2) a bona fide promissory note with reasonable interest rates, and (3) proper documentation of all terms. Iron Gate Holdings has completed 3,800+ compliant transactions.

What assets qualify for a structured installment sale?

Qualifying assets include investment real estate (residential, commercial, rental, agricultural), businesses and professional practices (dental, medical, law firms), collectibles (art, antiques, wine), highly valued residential property, cryptocurrency, and personal residences (for gains exceeding the $250K/$500K exclusion). The minimum transaction with IGH Trust is $100,000.

What is the difference between a trust-based and annuity-based SIS?

A trust-based SIS (like IGH Trust) uses a revocable trust with a secured promissory note, published fixed rates (5–7%), $100K minimum, and potential step-up in basis for estate planning. An annuity-based SIS uses an irrevocable annuity contract, typically requires $500K+ minimum, has market-dependent rates, and no step-up in basis. Both defer capital gains under IRC Section 453.

How is a SIS different from a 1031 exchange?

Key differences: (1) No replacement property required — a 1031 exchange requires identifying like-kind property within 45 days. (2) No tight deadlines. (3) Works for businesses, collectibles, and personal residences — not just real estate. (4) You receive cash income instead of acquiring another illiquid asset. Both defer capital gains taxes, but SIS provides income while 1031 requires continued real estate ownership.

Can I access my funds early if I need them?

The standard structure involves scheduled payments over your chosen term. However, there may be options available depending on your specific situation. During your consultation, we can discuss any flexibility requirements you have and structure the arrangement accordingly.

What happens if I pass away before the note is fully paid?

The promissory note is an asset that passes to your estate or designated beneficiaries. Your heirs will continue to receive the scheduled payments under the same terms. This can be an effective estate planning tool, providing your beneficiaries with a structured income stream.

How do I choose between 10, 15, or 20-year payment structures?

The optimal term depends on your specific goals: a 10-year term provides higher quarterly payments and faster access to principal, while longer terms (15-20 years) maximize tax deferral benefits and provide steadier income. Our specialists will help you model different scenarios based on your tax situation, income needs, and long-term financial plans.

What is constructive receipt and how does a SIS avoid it?

Constructive receipt is a tax principle where income is considered received when made available to the taxpayer, even if not physically in hand. A SIS avoids constructive receipt because the seller never directly touches the sale proceeds — funds go from escrow directly to the trust. This distinction is what qualifies the transaction for tax deferral under IRS Section 453.

What is the minimum for a structured installment sale with IGH Trust?

IGH Trust's minimum transaction is $100,000 in capital gains. This is significantly lower than many annuity-based providers that require $500,000 or more, making SIS accessible to a broader range of sellers.

What is the difference between SIS and 537 IST?

Both are offered by Iron Gate Holdings. The SIS is designed for gains from $100K to $1M with a streamlined 3-step process and fixed payment terms. The 537 IST (Installment Sale Trust) is designed for larger transactions ($1M+) with more complex trust structures, investment management, and additional liquidity options. Both use IRC Section 453 for tax deferral.

What is a Structured Installment Sale (SIS)?

Q: What is a structured installment sale?

A Structured Installment Sale (SIS) is a tax deferral strategy where the seller of an appreciated asset directs sale proceeds into a trust instead of receiving them directly. The trust then pays the seller in quarterly installments over a chosen term (5–20 years). Capital gains taxes are paid only on the gain portion of each payment as received, per IRS Code Section 453.

A Structured Installment Sale is a financial strategy that allows sellers of high-value assets—such as real estate, businesses, or collectibles—to defer capital gains taxes by directing sale proceeds into a trust.

How It Works

Instead of receiving the sale proceeds directly—which would trigger immediate taxation—the funds are directed from escrow into the IGH Trust. The trust then pays you installments over your chosen term (10-20 years), and you pay capital gains taxes only on the gain portion of each payment as you receive it.

This structure is authorized under IRS Code Section 453 and documented in IRS Publication 537. The key requirement is that you never take "constructive receipt" of the proceeds—they go directly from the buyer through escrow into the trust.

Key Benefits

The SIS strategy offers multiple advantages for sellers of appreciated assets.

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Defer Capital Gains Taxes

Spread your tax liability over the payment term instead of paying all at once.

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Avoid Large Upfront Tax Payment

Keep more money working for you from day one of the sale.

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Stay in a Lower Tax Bracket

Spreading income over time may keep you in lower marginal tax brackets.

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Earn Interest on Pre-Tax Funds

The compounding power of earning interest before taxes are paid.

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Predictable Income Stream

Receive scheduled principal + interest payments quarterly.

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Estate Planning Flexibility

Structured distributions can be incorporated into your estate plan.

The 3-Step Process

Step 1

Promissory Note Issued

You select your preferred payment terms and receive a secured promissory note from the IGH Trust. Terms range from 10 to 20 years with competitive interest rates.

Step 2

Asset Sold & Funds Enter Trust

The proceeds from your sale go directly from escrow into the IGH Trust—you never take constructive receipt. This is critical for IRS compliance.

Step 3

Deferred Taxation Begins

You receive regular quarterly payments according to your promissory note. Capital gains taxes are paid only on the gain portion of each payment as received.

Payment Structures

Choose the term and structure that best fits your financial goals.

Term	Interest Rate	Available Structures
10-Year	6%	Fully amortized OR Interest-only + balloon
15-Year	6.5%	Fully amortized OR Interest-only + balloon
20-Year	7%	Fully amortized OR Interest-only + balloon

Rates subject to change. Contact us for current rates and terms.

IRS Compliance

The Structured Installment Sale strategy is fully compliant with IRS regulations. Key compliance elements include:

•IRS Code Section 453 — Governs installment sales and tax deferral
•IRS Publication 537 — Provides detailed guidance on installment sales
•No Constructive Receipt — Funds flow directly from escrow to trust
•Fiduciary Trustee — Professional trust management and documentation
•Secured Promissory Note — All terms properly documented and enforceable

Frequently Asked Questions

Trust-Based vs. Annuity-Based Structured Installment Sales

Not all structured installment sales are the same. The two main approaches differ in structure, flexibility, and estate planning implications.

Factor	Trust-Based (IGH Trust)	Annuity-Based
Structure	Revocable trust + promissory note	Irrevocable annuity assignment
Minimum	$100,000	Typically $500,000+
Rate Transparency	Published: 5–7% fixed	Market-dependent, often opaque
Estate Planning	Step-up in basis potential	No step-up (annuity rules)
Flexibility	Revocable, negotiable liquidity	Irrevocable once assigned
Process	3 steps, direct relationship	5+ steps, through intermediaries

See the full comparison of all capital gains deferral strategies

Your Trust Team

Kevin Brunner

Founder & CEO

Marine veteran with 40+ years in business and financial services. 3,800+ transactions. Best-selling author. Featured in Forbes. Hosted The Smart Money Hour on KABC.

Craig S. Redler, JD, TEP

Trustee & Attorney

Internationally recognized estate planning and trust administration attorney. Trust and Estate Practitioner (TEP) designation from STEP. JD from Washington University School of Law.

Morris Chub, CPA

Trust Administrator

CPA and CFO with 40+ years of experience specializing in tax strategies to defer and mitigate capital gains taxes. Experience with pre-IPO and publicly traded companies.

Meet the full team

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