Your real estate losses are stuck behind a dam. Your sale gain is about to flood through in one year. Let the gain out in measured drops, and the two finally meet.
The tool is Section 453, the installment method: carry the buyer's note yourself (seller financing) or use a structured installment sale. Same tax math either way.
Seven slides. Your numbers. An illustration: how much to structure, for how long, what it's worth, and the part nothing can fix.
Pick your road:
Straight installment sale. You're selling one property and you own others (rentals, LP deals) that already throw off paper losses. Those losses shelter the gain. No 1031 needed.
1031 plus installment boot. You keep most of the money in real estate. The new building (new debt, cost segregation, bonus) creates the losses that shelter the part you take out.
Paper losses the passive rules won't let you use against your salary. Leave a box at zero if it doesn't apply. Homes you live in don't count.
New debt and new cash create "excess basis": the only part that gets fresh depreciation, cost segregation and bonus. No new debt, almost no new losses.
Bonus depreciation assumed 100% federal (property acquired after Jan 19, 2025). California allows none. The structured slice is carved out at closing and never passes through your 1031 intermediary.
Every number here runs on the same engine as the full calculator and the 13 cases in The Waterfall Strategy. It is an estimate for education, not tax advice. The terms have to be in your purchase contract before closing.
I'll email you this illustration with your numbers, a CPA-ready summary, and The Waterfall Strategy. If it looks like a fit, I'll suggest a 15-minute call with you and your CPA. If it doesn't, I'll tell you that too.
Text or DM the word WATERFALL and I'll send you the book: 10 cases where this works and 3 where it doesn't.
If you call, text or DM, Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities. Hans is paid a commission only if a structured sale is funded; seller financing pays him nothing.
Talk to your CPA and tax attorney before implementing anything. Important disclosures and conflict of interest (Hans is paid about 2.4% of the amount structured by the insurer when an annuity-funded structured sale is placed; on any other funding, his pay is disclosed in writing before you decide; no commission on seller financing or if you don't structure). Hans Goldstein: Tax & Exit Planning. Hans is a licensed insurance agent (CA Insurance License #4273294, NPN 20602398; nonresident licenses in other states); insurance products offered through Goldstein & Co. LLC dba Goldstein Insurance Services, which offers insurance only; tax planning fees are charged by Hans Goldstein individually. No insurer or annuity is named or offered here. In a structured sale you are paid by an assignment company, usually funded by a fixed annuity it owns from a highly rated life insurer; some programs use a funding agreement instead (a different kind of contract issued by a highly rated life insurer). The structures discussed here are fixed; when annuity-funded, the annuity is a fixed annuity, identified in the insurer's own documents before you sign. Your inputs stay in your browser unless you submit the results form. Privacy policy. He is not a CPA, EA or attorney. Estimates use 2026 federal tables, California's 2025 schedules, NIIT, the §469 passive loss rules, §453(i), Reg. §1.453-12 and the Schedule D worksheet. California doesn't allow bonus depreciation or recognize real estate professional status, so California loss figures are assumed at 40% of federal for LP deals and look-back studies. Losses still unused at the end are given no value.