Five ways to defer the tax on a sale. They all sound legitimate, but they differ widely in risk, flexibility, and what they require of you. Below they are side by side, including the IRS-scrutiny differences the promoters won't mention.
By Hans Goldstein, EA, Tax & Exit Planning · Updated
Admitted to practice before the IRS.
When you're facing a big capital gain, you'll hear about several deferral structures. They are not interchangeable. This page compares the five most common and flags which ones the IRS has been scrutinizing.
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.
| Structure | How it defers | Requires | IRS standing |
|---|---|---|---|
| Structured Installment Sale (§453) | Spread proceeds over years; taxed as received | Nothing to buy; carrier-funded payments | Built on the §453 statute; recognized |
| 1031 Exchange | Roll gain into like-kind real property | Replacement property within 45/180 days | Well-established (real property only) |
| Deferred Sales Trust | Trust buys/resells; pays you over time | Third-party trust + trustee | Gray area; no IRS ruling |
| Opportunity Zone | Defer + potential step-up | Invest in a QOF; current designations sunset after 2026 | Statutory but time-limited |
| Charitable Remainder Trust | Defer + income + charity | Irrevocable trust; charitable intent | Well-established |
The "best" deferral structure depends on what you're selling, whether you want to keep owning, and how much tax risk you'll accept. For most sellers of a business, land, stock, or a property they want to exit, a structured installment sale is the cleanest fit. Run your numbers before you decide.
A partial exchange is the common case, and the boot is where the tax actually lands. The calculator prices it in your state, splits what must be recognized now from what a note can spread, and compares taking the cash against carrying it.
Open the 1031 boot calculatorIt depends on the asset. For real estate you want to keep, a 1031 exchange. For a business, land, stock, or property you want to exit, a structured installment sale under §453 is usually the most flexible and conservative. A charitable remainder trust fits charitable goals.
A 1031 defers tax only if you reinvest in like-kind real estate within strict deadlines. A structured installment sale spreads the gain over years without buying anything and works for assets a 1031 can't cover, like a business or stock.
Generally no. 1031 exchanges and structured installment sales rest on well-established statute, while Deferred Sales Trusts operate in a gray area without a specific IRS ruling and have drawn enforcement scrutiny of related arrangements.
Opportunity Zones remain available, but the current zone designations are set to sunset after 2026 and the benefit structure changes over time. They require investing in a Qualified Opportunity Fund, unlike a structured installment sale.
A 1031 exchange does not work for a business sale (it's for like-kind real estate). A structured installment sale, a charitable remainder trust, or in some cases an Opportunity Zone investment can defer gain from a business sale.
Before you sign anything, run your numbers with someone who structures the deal to cut the tax and hold up in an audit.
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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.
No IRS ruling approves the structure, so it rests on general installment-sale rules and the trust being truly independent of you. You hand the sale proceeds to a trustee who invests them, so your payments depend on how those investments do, and trustee and promoter fees come out along the way. If the IRS treats the trust as your agent or a sham, the whole gain can be taxed in the year of sale.
Yes. The July 2025 tax law made the program permanent. Gains invested in a Qualified Opportunity Fund under the original rules still defer only until December 31, 2026. Investments made from January 1, 2027 get a rolling five-year deferral and a 10% basis increase (30% for rural funds), with new zone designations every 10 years. A 10-year hold still makes the fund growth tax-free.
You must reinvest the gain in a Qualified Opportunity Fund within 180 days, the money is tied up for years, and the fund carries real estate or operating-business risk in a designated low-income area. The deferral is temporary: the deferred gain comes due at the end of the period whether or not the fund paid you anything. The biggest benefit, tax-free growth, needs a 10-year hold.
No. A deferred sales trust is an installment arrangement: you sell to a trust, it resells, and it pays you under a note. A Delaware statutory trust is a real estate ownership vehicle that can be like-kind replacement property in a 1031 exchange under Rev. Rul. 2004-86. One defers by spreading payments, the other by staying invested in real estate.
Sources: IRS: Opportunity Zones; Rev. Rul. 2004-86 (IRB 2004-33); IRS Publication 537, Installment Sales. Checked October 3, 2026.
