Get 121 Exclusion by Selling to My Own Entity?

[Nick R.]

I'm still in the Section 121 exclusion window for a property of mine that's appreciated significantly since I bought it. I like it as a rental property and also as a long-term appreciation play given its location, but I don't want to pass up the Section 121 exclusion. Ideally I would create an entity, sell the property to the entity (probably an installment contract -- the property is mortgaged and I don't need any cash) to realize the Section 121 exclusion, and then continue renting the property out long-term through the entity, with the higher cost basis and thus greater depreciation.

Is this viable? And is an S-Corp the only option?