Installment sale

A sale where the seller takes part of the price over time (often as a seller note) and reports the gain in the years the payments arrive rather than all at once, spreading the tax bill across those years.

For a seller it can soften a single large tax year, but the relief is paid for by carrying the buyer's credit risk, so it is a trade-off to price, not free money; for a buyer it is why a seller note and the deal structure interact with the seller's tax planning.

In numbers: On a $1M gain taken $200k a year over five years, the seller is taxed on roughly the gain in each year's payment instead of the whole $1M at once, which can keep more of it in lower brackets, but if the business falters the later payments are at risk.