What is the best alternative to a 1031 exchange?

A Structured Installment Sale (SIS) is the most flexible alternative to a 1031 exchange. Unlike a 1031, SIS requires no replacement property, has no 45/180-day deadlines, works for businesses and collectibles (not just real estate), and provides cash income instead of another illiquid asset. Both defer capital gains taxes under IRS rules.

Structured installment sale vs 1031 exchange — which is better?

It depends on your goal. Choose a 1031 exchange if you want to continue owning real estate and can identify replacement property within 45 days. Choose an SIS if you want cash income, cannot find suitable replacement property, are selling a business (not eligible for 1031), or want to avoid the stress of 1031 timelines. Both legally defer capital gains taxes.

What is the difference between a trust-based and annuity-based structured installment sale?

A trust-based SIS (like IGH Trust) uses a revocable trust with a secured promissory note, published fixed rates (5–7%), $100K minimum, and potential step-up in basis for estate planning. An annuity-based SIS uses an irrevocable annuity contract, typically requires $500K+ minimum, has market-dependent rates, and offers no step-up in basis. Both defer capital gains under IRC Section 453.

Can I combine a 1031 exchange with a structured installment sale?

Not directly in the same transaction, as they use different IRS mechanisms. However, if a 1031 exchange fails (you cannot identify replacement property within 45 days), the proceeds can potentially be redirected into a structured installment sale arrangement. IGH Trust can advise on failed 1031 recovery options.

What is the difference between SIS and 537 IST?

Both are offered by Iron Gate Holdings. The SIS (Structured Installment Sale) is designed for gains from $100K to $1M with a streamlined 3-step process and fixed payment terms. The 537 IST (Installment Sale Trust) is designed for larger transactions ($1M+) with more complex trust structures, investment management, and additional liquidity options. Both use IRC Section 453 for tax deferral.

How does a Delaware Statutory Trust (DST) compare to a structured installment sale?

A DST is a passive real estate investment used as replacement property in 1031 exchanges. You must reinvest in real estate and meet 1031 timelines. An SIS requires no reinvestment, no deadlines, and provides cash income. A DST keeps you in real estate; an SIS gives you liquidity. DSTs are typically used when you want to stay in real estate but eliminate management responsibilities.

When should I use an Opportunity Zone fund vs a structured installment sale?

Opportunity Zone funds require investment in designated geographic zones with 5–10 year hold periods. They offer partial capital gains exclusion (not full deferral). An SIS has no geographic restrictions, provides immediate quarterly income, and defers the full gain over the payment term. Choose OZ funds if you want long-term appreciation in specific areas; choose SIS if you want predictable income.

What is a Deferred Sales Trust and how does it compare?

A Deferred Sales Trust is an irrevocable trust structure for capital gains deferral. Key differences from IGH Trust's SIS: Deferred Sales Trusts are irrevocable (no flexibility once established), offer little liquidity, and do not provide step-up in basis for heirs. IGH Trust's structure is revocable, provides negotiable liquidity, and may qualify for step-up in basis.

Which capital gains deferral strategy is right for me?

Key decision factors: (1) Asset type — 1031 only works for real estate; SIS works for any asset. (2) Reinvestment intent — if you want to stay in real estate, consider 1031 or DST; if you want cash income, consider SIS. (3) Gain size — under $1M, SIS is ideal; over $1M, consider 537 IST. (4) Timeline — if you need to act quickly, SIS has no deadlines; 1031 has strict 45/180-day windows. Use our Revenue Estimator to model your specific scenario.

Are there any strategies that provide full tax elimination, not just deferral?

A Charitable Remainder Trust (CRT) can eliminate capital gains tax, but you must donate the remainder to charity. A 1031 exchange followed by holding until death (with step-up in basis) can effectively eliminate the tax for heirs. An SIS provides deferral with potential step-up in basis at death through IGH Trust's structure. No legal strategy eliminates capital gains tax for the seller while keeping 100% of proceeds — strategies that claim otherwise should be scrutinized carefully.

Compare Capital Gains Deferral Strategies

There are multiple ways to defer or reduce capital gains taxes when selling appreciated assets. Each strategy has different requirements, restrictions, and trade-offs. This guide compares 8 common approaches side by side — including the Structured Installment Sale, 1031 Exchange, Delaware Statutory Trust, Opportunity Zone, and more — so you can identify which strategy fits your situation.

Quick Decision Guide

Want to reinvest in real estate?

Consider a 1031 Exchange or Delaware Statutory Trust (DST)

Requires like-kind property within 45/180-day deadlines

Want cash income, not another asset?

Consider a Structured Installment Sale (SIS)

No replacement property, no deadlines, quarterly payments

Selling a business (not real estate)?

Consider SIS (under $1M gain) or 537 IST (over $1M)

1031 exchanges do not apply to business sales

Want to support charity and reduce taxes?

Consider a Charitable Remainder Trust (CRT)

Eliminates capital gains but requires charitable donation of remainder

8-Strategy Comparison Table

Side-by-side comparison of the most common capital gains deferral strategies.

Strategy	Eligible Assets	Minimum	Deadlines	Replacement Property?	Cash Income?
Structured Installment Sale (SIS)	Any appreciated asset	$100K	None	No	Yes — quarterly
1031 Exchange	Like-kind real estate only	None	45-day ID / 180-day close	Yes — required	No
Delaware Statutory Trust (DST)	Real estate (as 1031 replacement)	$100K–$250K typical	Same as 1031	Yes — passive RE	Distributions (variable)
Deferred Sales Trust	Any appreciated asset	Varies	None	No	Installments only
Opportunity Zone Fund	Any capital gains (reinvest in OZ)	Varies by fund	180-day reinvestment	Yes — in OZ property	No (appreciation only)
Charitable Remainder Trust (CRT)	Any appreciated asset	Varies	None	No	Yes — but remainder to charity
721 Exchange / UPREIT	Real estate only	Varies	None	Partnership units (not property)	Distributions (variable)
Traditional Installment Sale	Any asset	None	None	No	Yes — but buyer default risk

Trust-Based vs. Annuity-Based Structured Installment Sales

Not all structured installment sales are the same. The two main approaches — trust-based and annuity-based — have fundamentally different structures, protections, and trade-offs.

Factor	Trust-Based (IGH Trust)	Annuity-Based
Structure	Revocable trust + promissory note	Irrevocable annuity assignment
Minimum Transaction	$100,000	Typically $500,000+
Interest Rates	Published: 5–7% fixed	Market-dependent, often opaque
Estate Planning	Step-up in basis potential	No step-up (annuity rules)
Flexibility	Revocable, negotiable liquidity	Irrevocable once assigned
Process	3 steps, direct relationship	5+ steps, through intermediaries
Trustee	Fiduciary trustee (personal service)	Insurance company claims-paying
Upsell Path	537 IST for deals over $1M	Single product only

When an annuity-based approach might make sense

Annuity-based structured installment sales may be appropriate for sellers who prioritize the claims-paying guarantee of a large insurance company over flexibility, who have gains exceeding $500K, and who do not need estate planning features like step-up in basis. Both approaches are legitimate IRS-compliant strategies for deferring capital gains under Section 453.

SIS vs. 537 IST — IGH Trust's Two Products

Iron Gate Holdings is one of the few providers offering both a streamlined SIS and a full 537 Installment Sale Trust. Here's how they compare.

Feature	SIS (Structured Installment Sale)	537 IST (Installment Sale Trust)
Ideal Gain Size	$100K – $1M	$1M+
Payment Terms	5, 10, 15, or 20 years fixed	Custom structured (10yr standard)
Process	3 steps (streamlined)	4 steps (more comprehensive)
Liquidity	Tied to note terms	Full liquidity (3–7 business days)
IRS Foundation	IRC 453 / Pub 537	IRC 453 / Pub 537
Best For	Small-to-mid business & RE sales	Large, complex transactions

Frequently Asked Questions — Capital Gains Strategies Compared

Explore By Asset Type

Selling Real Estate

Tax implications and deferral for investment & rental property

Selling a Business

Tax implications for dental practices, professional services & more

What is a SIS?

Complete guide to Structured Installment Sales

Revenue Estimator

Free calculator — model your specific scenario

Not Sure Which Strategy Is Right for You?

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Important Disclosure

This comparison is provided for general educational purposes only. It is not intended as specific investment, tax, or legal advice. Each strategy has unique requirements and tax implications depending on your situation.

Always consult your tax advisor and/or attorney before making decisions about capital gains deferral strategies. Rates and terms are subject to change. Iron Gate Holdings and its affiliates do not provide tax or legal advice.