Yes, and for the right deal it's worth doing. A 1031 defers the like-kind portion; a §453 installment sale can defer the 'boot' (the part you don't roll into a replacement property). Below is how they work together.
The combination only pays when enough of the boot is spreadable. The calculator shows how much of yours is (cost-seg recapture and debt relief never are) and what the spread saves after the §453A interest charge.
Open the 1031 boot calculatorMost people treat a 1031 exchange and an installment sale as either/or. They're not. In the right transaction, you can use both, deferring more of the gain than either could alone. This is how it works.
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Go deeper: a side-by-side look at a 1031 exchange and an installment sale on Big Sale Tax.
A 1031 exchange defers gain only to the extent you reinvest in like-kind property. Anything you don't reinvest, the "boot" (cash, debt relief, or value you keep), is taxable. A pure 1031 also forces you to buy a replacement property on a strict clock.
Combining these requires careful structuring with your qualified intermediary, because the timing and documentation determine whether the installment treatment holds. It has to be set up before closing. The structured portion is paid at closing directly to the assignment company, never through the intermediary. This is exactly the kind of deal where a deferral specialist working alongside your QI earns their keep.
You don't have to choose between a 1031 and an installment sale. Used together, they can defer the like-kind portion and the boot, letting you reinvest part, cash out part, and still spread the tax. Plan it before you close.
Yes. A 1031 defers gain on the portion you reinvest in like-kind property, and a §453 installment sale can defer the tax on the 'boot' (the cash or value you don't reinvest) by spreading it over future years.
Boot is the part of your proceeds you don't reinvest into the replacement property: cash, debt relief, or kept value. It's normally taxable, but structuring it as installment payments can defer that tax.
If you carry a note for part of the sale price, the installment method applies: you're taxed on that gain as you receive the payments, not all at once. This can be combined with a 1031 on the reinvested portion.
Because a pure 1031 forces you to reinvest everything to fully defer. Combining lets you reinvest part, take part off the table, and still defer the tax on the cashed-out portion. That's useful when your replacement property costs less than your sale.
Set it up before closing, with your qualified intermediary and a deferral specialist. The structured portion is written into the contract and paid at closing directly to the assignment company, never through the intermediary. The timing and documents determine whether the installment treatment holds.
Before you sign anything, run your numbers with someone who structures the deal to be tax-smart and audit-ready from day one.
Call 213-414-2808 Run the Numbers →
A plain-English guide for sellers on how a structured installment sale defers the tax when you sell a business, practice, or property. It covers the math, the alternatives, and how to tell if your deal fits.
Leave your details and the PDF downloads right away. Within one business day Hans will email a preliminary read on which structure fits your deal. No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
📞 Hans Goldstein · 213-414-2808 · CA Insurance License #4273294 · Independent §453 specialist · Goldstein & Co. LLC
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Hans Goldstein is an Enrolled Agent, admitted to practice before the Internal Revenue Service. Not affiliated with or endorsed by the IRS. General education, not tax or legal advice for your situation.
