A Quiet Strategy for People Who Built Something

Trapped by your own success.

If you've owned a home, a business, or property for decades, you may be sitting on a tax bill that's keeping you from the next chapter of your life. There's a legal alternative most CPAs never mention.

Margaret raised three children in that house. She and Harold bought it in 1986 for a hundred and eighty thousand dollars — a stretch then, a bargain now. Today the same house is worth two-point-four million.

The stairs are too much. The yard is too big. Her grandchildren live two states away.

Margaret found a beautiful single-story two blocks from her daughter. She had the down payment ready. She'd already started boxing up the attic.

Then she met with the accountant.

The tax bill on the sale, he told her, would be more than six hundred thousand dollars — even after the homeowner's exclusion for married couples. Federal capital gains. California state tax. The Medicare surcharge. Numbers she'd never thought about for a house she'd just lived in.

So Margaret stayed. She climbs the stairs. She watches her grandkids grow up on a phone screen.

She doesn't have to.

— A composite of real situations we hear every week.

The Two-Minute Estimate

See what your sale would actually cost.

Most sellers see only the price on the offer. The IRS sees something else. Enter three numbers below and see both — side by side.

The IRS lets primary-residence owners exclude a fixed amount of gain — not all of it. Anything above the cap is still fully taxable.

Gross gain on sale $0
Taxable gain $0
Federal capital gains (20%) $0
State capital gains $0
Net Investment Income Tax (3.8%) $0
Sell Directly
$0
owed to IRS & state next year
With Section 453
$0
owed at closing
Enter your numbers to see the difference.

Estimates use 20% federal long-term capital gains rate and the 3.8% Net Investment Income Tax. State rate is taken from your selection above. Actual liability depends on your full tax situation, depreciation history, holding period, filing status, and other factors. This calculator is for educational illustration only — it does not constitute tax, legal, or investment advice. A qualifying transaction must be reviewed by a DST attorney before any structure is implemented.

Three Real-World Situations

Same sale, two different tax bills.

— Hypothetical I

Commercial Property

New York City

Sale proceeds$20,000,000
Original basis$5,000,000
Capital improvements$1,000,000
Depreciation taken$4,000,000
Taxable gain$18,000,000
Sell directly $6,770,000
With Section 453 $0

Federal 20–25% with Section 1250 recapture, NY combined 12.7%, NIIT 3.8%. Hypothetical illustration.

— Hypothetical II

A Business Sale

Chicago, Illinois

Sale proceeds$10,000,000
Original basis$0
Outstanding loan$250,000
Taxable gain$10,000,000
  
Sell directly $2,495,000
With Section 453 $62,375

Federal 20%, IL 4.95%. Mortgage-over-basis of $250k is non-deferrable. Hypothetical illustration.

— Hypothetical III

The Family Home

Los Angeles, California

Sale proceeds$4,000,000
Original basis$400,000
Mortgage at closing$300,000
§121 exclusion$500,000
Taxable gain$3,100,000
Sell directly $1,150,100
With Section 453 $0

Federal 20%, CA 13.3%, NIIT 3.8%. Married couple, 10-year residence. Hypothetical illustration.

A Four-Step Process

How it actually works.

i.

Submit your scenario

Share the basics about your asset — type, estimated sale price, and timeline. Takes about two minutes.

ii.

Get a free illustration

An experienced DST attorney and case manager review your case and prepare a personalized tax-deferral illustration.

iii.

Conditional engagement

No upfront retainer, no obligation. You pay only if your sale closes and you choose to fund the trust.

iv.

Sell with the structure in place

The attorney implements the trust at closing. Proceeds are invested per your risk tolerance; payments follow your schedule.

Questions People Ask First

Things worth knowing upfront.

Doesn't the homeowner exclusion already cover the tax on my house?
Only up to a point. The IRS §121 exclusion lets you exclude $250,000 of gain if you're single, or $500,000 if you're married filing jointly — provided you've owned and used the home as your primary residence for at least 2 of the last 5 years. That's a fixed cap, not a percentage. For long-held homes in appreciated markets, the gain often exceeds the cap by a wide margin, and everything above the cap is fully taxable at capital gains rates. Depreciation recapture (from any prior rental or home-office use) isn't shielded by §121 at all.
Is this actually legal?
Yes. The structure relies on IRC Section 453, the same code section that governs traditional installment sales (sometimes called "seller carry-back" sales). Trust law and installment-sale law have existed for decades. The strategy must be properly structured by an experienced attorney to qualify — that's what the consultation determines.
Why has my CPA never mentioned this?
Most CPAs focus on tax compliance and the strategies they routinely implement — 1031 exchanges, charitable remainder trusts, the §121 exclusion. Section 453 installment-sale structures of this size are specialized work, typically handled by a small group of tax attorneys. Your CPA can absolutely review the proposed structure before you proceed, and most do.
How do I get paid?
The trust pays you under an installment sales contract you negotiate in advance. Payments can begin immediately or be deferred for months or years. Each payment is part return of basis (tax-free), part capital gain (taxed at capital gains rates), and part interest (taxed as ordinary income). Terms are flexible — interest-only, partial principal, or full amortization.
What happens if I die?
With proper estate planning, the remaining payments continue to your heirs under the original note terms. With additional planning, the proceeds can potentially be removed from your taxable estate.
What if capital gains rates change later?
You'd pay the new rate on the capital gains portion of payments received after the change. Tax law changes typically come with adequate notice for sound planning decisions.
Can I keep some cash at closing?
Yes. You can elect to take a portion of proceeds outside the trust at closing. Capital gains tax would apply to that portion in the year of sale, just like a normal sale. The remainder defers.
Is this the same as a 1031 exchange?
No — and that's part of the appeal. A 1031 requires identifying a like-kind replacement property within 45 days and closing within 180. Section 453 has no replacement requirement, no 45-day window, and works for businesses, primary residences, and other assets where 1031 doesn't apply at all.
How much does it cost?
There's no upfront cost to evaluate your case or receive an illustration. The conditional engagement requires no retainer. Fees are charged only at the funding of the trust, and only if you choose to proceed after closing. The attorney will walk you through fee structure during your call.

See if your sale qualifies.

A specialist will review your case and prepare a personalized illustration. No cost, no obligation. Your information is reviewed in confidence and is never sold.

Your case is in review.

A specialist will reach out within one business day to walk you through your personalized illustration. In the meantime, expect a confirmation email at the address you provided.

Submissions are reviewed by experienced DST attorneys and case managers. Not all transactions qualify.