who knows about Pros and cons of an 453 deferred self trust?

[Juan Risi]

Looking for a mechanism where I deferred or minimized the tax consequences in a capital gain when selling an investment property. Also I want to have no time limit to find another property like 1031, I want the freedom to look for the right replacement.

[Nicholas Aiola]

@Juan Risi A Deferred Sales* Trust (DST) can be used to defer capital gains on the sale of a property. There are some snags to be aware of, though. Think of a DST as a seller financing transaction where you're both the seller and buyer.

You're "selling" the property to a trust, which must pay you (the individual) back in installments over time, at which point you (the individual) will recognize capital gains and pay tax on those gains as the money is received.

453 DSTs are also generally more costly to complete and maintain.

You also may not be able to defer all depreciation recapture with the 453 DST.

The time constraint on a 1031 exchange isn't as short as it sounds. You can always aim to do a 1031 exchange and use the 453 DST as a fall back in case the 1031 fails.

453 DSTs are a popular option for those who want to transition away from real estate and "exchange" their property for other investments, like marketable securities.

This is the tip of the iceberg but, hopefully, it shed a bit more light on the situation.