Leawood, Kan.-based Creative Marketing Intl Corp. and CrailHuntly, LLC, are partnering to nationally market CrailHuntly’s 453 Commercial Loan ProgramTM, an integrated buyer-financing and seller tax-deferral program, which applies annuities‘ income tax advantages for the purchase and sale of commercial real estate and private businesses.
With the 453 CLP, independent agents and financial advisors can help their clients sell highly appreciated assets for income taxes and deal financing. The seller’s tax-liability spreads over an extended term to provide tax deferral and return stability. Rather than a traditional commercial loan, more favorable financing terms are available for the buyer, and greater revenue can be produced for each participating lender.
The 453 CLP can also alleviate common problems regarding the purchase and sale of highly appreciated assets by surmounting common seller-financing issues, reduced loan-to-value ratios, and new SBA restrictions concerning loans against goodwill.
By leveraging an installment sale, the 453 CLP combines the buyer’s financing and proceeds payment to the seller, which is managed by the same lending institution. The buyer and seller determine the amount and frequency of payments, which are made at interest, and the seller pays taxes only as each payment is received. Through the purchase and use of a specially structured annuity, there is asset-liability matching for the lender.
“Much is being said about the recent lending conditions and pending changes in tax laws affecting the purchase and sale of businesses and commercial real estate,” says Bruce Gordon, president of CrailHuntly. “But this may be a solution that can help bring all the parties back to the negotiating table for many transactions.”
The 453 CLP comes at a time when a recent Wall Street Journal article “How the New Wealth Taxes Will Hit You” suggests there is an increased importance and value of tax planning flexibility. According to the article, “ Taxpayers selling assets should consider installment sales if spreading out the income would minimize the new tax.”