Instrument sale price gap calculator
For violin, viola and cello dealers. A fine instrument is taxed as a collectible: the seller's normal rate on the gain, capped at 28% federal, plus state, plus sometimes 3.8%, all in one year. Spreading the payments often lets a seller take a lower price and still end up with the same money. Enter the deal and see how much room there is.
How much lower can your seller go and still net the same?
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Before the purchase agreement only. The installment sale has to be in the contract before anyone signs. It can't be used at auction or added after closing.
Price room = how much lower the seller can price the instrument on an installment sale and end up with the same as taking the full asking price in one lump sum, invested after tax at the same rate.
Payments are level, the buyer pays in full at closing, and an insurance company pays the seller. Illustration only, October 2026: 2026 federal brackets, 2025 California brackets, married filing jointly, standard deductions, collectible gain taxed up to 28%, 3.8% surtax above $250,000 of income. Not tax advice.
Stuck deal? Call 213-414-2808Deeper reading: capital gains tax on violins and instruments.
Installment sale + 1031 + ILIT: when is it a slam dunk?
For a large estate, a 1031 exchange, an installment sale and a trust-owned life insurance policy (an ILIT) can work together. It tends to win when most of these are true (2026 figures: the federal estate tax exemption is $15,000,000 per person, $30,000,000 for a married couple):
- Your estate is clearly over the line: a projected estate tax bill of $10,000,000 or more.
- You are married, age 50 to 60, in preferred health or better. At 75 or older, single, or in a rated health class it usually does not win.
- One separate property has stuck (suspended) passive losses at least as big as its gain.
- That property earns little: low cap rate, slow growth.
- You would sell or borrow anyway, or you do not have the cash on hand to pay the premiums.
Four or five true? Run the numbers. Enter your own estate and ages below, or open the full calculator. Estimates from published rates, not a quote or advice; your CPA and attorney decide.