Have Any Of You Heard About This Type Of Transaction

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Someone Discussed A New (To Me) Type Of Investment

Monetized Installment Sale (M453) Transactions. They were formerly called “collateralized installment sale” or “C453” transactions. They are based on Section 453 of the IRS Code.

A Person Has Property With A Low Basis

If they sell, large capital gains. If they do a 1031 Exchange, they have to move to a more expensive property and continue managing property.

This transaction allows them to get money out at no tax (loan proceeds) until the end of the contract (normally 30 years) or death.

Any comments from the financial planners. I understand installment sales and I understand 1031 Exchanges and I understand 1031 Tenants In Common Exchanges, but this 453, not so much.

9 Responses to Have Any Of You Heard About This Type Of Transaction

  1. Jason Lucey September 8, 2018 at 8:54 pm #



    Jason Lucey, Broker & Realtor

  2. Nancy Howard September 9, 2018 at 3:40 pm #

    Hi Duane et al:

    I’m a RealtorĀ® not a financial planner, but this article by Kastelberg Real Estate looks like a good description of the Monetized Installment Sale, complete with graphics.


  3. Juliet Kennedy September 9, 2018 at 8:34 pm #

    Hi Duane,
    My name is Juliet Kennedy and I am a student of yours. I just wanted to reply about the Monetized Installment. Yes, I know about it amd I actually did one transaction last January. I and my husband sold a 4 unit in Campbell, CA and we were able to defer capital gain tax for 30 years. There are some fees involve on this transaction but much lesser than the capital gain tax rate.
    If there is anything I can share to you or anyone interested. I would be more than happy to do so. Please feel free to reach out to me at 408-504-6167.
    Thank you.

    Juliet Kennedy

    • Duane Gomer September 13, 2018 at 9:46 am #

      Thank you for the informative comments and taking the time to send them. It is appreciated. I will call you soon after I finish a couple nagging projects. Keep in touch.

    • Barbara Rathbun September 17, 2018 at 2:52 pm #

      Juliet, thank you for commenting, I am equity rich but need to downsize (getting older)If I sell will have to give $300,000-400,000 to capital gains, if I am doing a 1031, then I have to buy more expensive then what I am selling for or equal too…how does this work..there must be some way to avoid letting the gov take my retirement? I am unfortunately in Calif as well,,that’s a big problem. thanks for any answer. thanks

      • Ken Karmolinski October 24, 2018 at 4:19 pm #

        Yes it is quite simple and very effective – there is a detailed video you can watch here http://www.capitalgaindeferred.com

      • Molly Faulkner November 25, 2018 at 1:53 pm #

        Happy Holidays, Everyone.

        This subject is one of many of IRS’ allowed 1031 Exchange Tax Deferred for 30 years program. My firm is a FINRA registered Wealth Management Firm specializing in tax strategies. I have a 17 page PDF summary of this exchange if anyone’s interested. My Wealth Manager will be more than happy to go thru some questions with you over the phone or in person. We’re located in Irvine, Orange County, CA. My number is 323-712-7889 Molly Faulkner.

  4. Larry Isaac September 16, 2018 at 9:25 am #

    Juliet that sounds like a 1031. What distinguishes a monetized installment from a 1031?

  5. Molly Faulkner November 25, 2018 at 2:05 pm #

    Hello Larry:

    A monetized installment sale is one of many types of 1031 Exchange the IRS allow to deferred taxes up to 30 years or death and the heirs get a step-up in basis at the time of transfer for estate under $20M.

    Molly 323-712-7889

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