If you already sold the company - your options are limited compare with situation when you are planning the sale.

Generally - it doesn't matter how you will use proceeds - selling the company and purchase a personal property will be viewed as two separate transactions.

The main question - how did you structure the sale - if you owed a corporation and sold shares of your corporation or you sold assets of your company.

In case of stock sale - you will have a capital gain (long or short term) based on your basis.

In case of assets sale - both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred.

The good way to reduce large taxable income in the single year - selling your business using installments - the buyer will typically pay a down payment, and then the seller finance the rest so that the buyer will pay in installments over a period of time, determined in the sales agreement plus an interest.

The main benefits to installment sales is that this will generally bring a higher price than bank-financed sales, and the taxes can be reported over time as you receive payments allowing you to defer tax on capital gains.

But not all asset sales can be reported in installments - inventory or accounts receivable are not eligible for installment accounting - you should pay tax on these items within the year of making the sale, whether you have already received payment or not.

You will find reporting requirements and examples in the IRS publication 537 - http://www.irs.gov/pub/irs-pdf/p537.pdf

Some assets may qualify for section 1031 like-kind exchange - if you use the proceeds to purchase similar property. There are complicated rules and such transaction should be planned very carefully.

Your taxable income is calculated for each asset = (selling price) - (basis); If you purchase the asset - the basis is its purchase price; The basis should be adjusted by any improvement expenses and depreciation. On most business properties held more than a year - the capital gain is taxed at reduced rate - not more than 15%.

Any gains on inventory, or accounts receivable are treated as ordinary income.

The gain on depreciable property is treated as ordinary income to the extent of depreciation you've already claimed on that property - this way the depreciation is "recaptured."

Please let me know if any clarification needed.

If you was the owner and the seller - you are the one who will be responsible for all tax liabilities resulted from the sale transaction - regardless if payments were made to third parties as per your directions.

But it is still not clear for me - the legal organization of your business - was your business formed as a corporation? and how did you structured the sale - as a stock sale or as an assets sale?

The sale transaction "not in a formal manner" - might be questionable. In case of audit - the IRA agent most likely will consider the full amount as taxable business income - not as a capital gain - unless you provide the formal sale contract and Form 8594.