Five options when you sell an investment property

Side by side: when the tax is due, who runs the property, what the deadlines are, and how easily you can get your money back out.

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Pick what matters most to you

Highlighting changes the view only. It does not recommend a path.

The same questions, answered for all five paths

Question	1031 into your own property	1031 into a DST	Installment sale	Qualified Opportunity Fund	Sell outright
What it is	You sell, then buy another property and run it yourself. Meet every Section 1031 requirement and the tax on your gain is postponed.	You buy a fractional interest in real estate that a sponsor owns and manages. The trust holding it is a Delaware Statutory Trust, or DST.	You sell and let the buyer pay you over time. At least one payment has to arrive in a year after the year you sell.	You put an eligible gain into a fund that invests in designated Opportunity Zones. This is a separate set of tax rules, not a 1031 exchange.	You sell without using Section 1031, pay whatever tax is due, and keep the rest.
When tax is due	Tax on the gain can be postponed if the exchange meets every Section 1031 requirement.	Tax on the gain can be postponed, if the DST qualifies under Revenue Ruling 2004-86 and the exchange rules are met. Not every DST qualifies.	You report gain as the payments arrive, so the tax spreads across those years. Interest in each payment is taxed separately. Depreciation recapture may still be due in full in the year you sell.	Delayed, not erased. For a qualifying investment made on or before December 31, 2026, the gain is generally taxed for the 2026 tax year — sooner if you sell your fund interest or another inclusion event happens first. Investments made after 2026 follow different rules.	Federal and state tax on the gain is generally due for the year you sell. The amount depends on your basis, depreciation, deductions, filing status, and other facts.
Who runs it	You run it, or you pay a manager to run it.	The sponsor runs the property. You do nothing day to day.	Nothing to run. You hold a loan to the buyer instead of a building.	The fund manager runs everything.	Nothing to run and nothing to buy.
Who decides	You make the decisions, within the limits of your loans, your leases, and any co-owners.	Very little. Investors generally cannot direct leasing, refinancing, or when the property is sold.	You and the buyer negotiate the loan: the rate, the payment schedule, and what secures it.	Usually limited. The fund documents set what you can and cannot do.	Full control of the money left after tax. No replacement property required.
Deadlines	Two deadlines, both starting the day your sale closes. Name the replacement property in writing within 45 days. Close on it within 180 days — or by your tax-return due date including extensions, if that is earlier.	The same 45-day and 180-day deadlines apply. Reviewing the offering and signing the subscription paperwork has to fit inside them.	No 45-day or 180-day clock. The sale and the loan documents still have to be structured correctly.	One clock, not two. An eligible gain generally has to be invested within 180 days, and the exact start date depends on how the gain arose.	No replacement-property deadline. Nothing has to be reinvested.
Getting cash out	You can sell or refinance later. Neither is quick and neither is guaranteed.	Hard to get out of. There is usually no market for your interest and no promised early exit.	Money arrives on the payment schedule. Selling the loan early can be difficult or expensive.	Usually locked up for years. Private-fund rules limit when you can get out.	Cash in hand after tax. No exchange rules limit what you do with it.
What can go wrong	Vacancy, tenants who stop paying, financing terms, and closing on time. With one property, everything rides on that property.	The property, the sponsor, the debt on it, and the fees all affect the outcome. It is a private security, so there is no public market and less disclosure than a listed investment. You can lose some or all of what you invest.	The buyer may stop paying. What secures the loan may not cover what is owed. Interest rates, inflation, and how the deal is structured all matter.	The fund, the projects it builds, the areas it builds in, and rules that may change. Getting out early is difficult.	Underestimating the tax bill. Whatever you do with the money afterward carries its own market and inflation risk.
Often considered by	Owners who want to keep making the decisions and can meet the deadlines.	Investors who want to stop managing property and can accept limited control, fees, and no easy way out.	Sellers willing to act as the bank and take payments instead of cash up front.	Investors looking at a long hold who accept that the rules differ by the date they invest.	Sellers who would rather have the cash than stay in real estate.

1031 into your own property

You sell, then buy another property and run it yourself. Meet every Section 1031 requirement and the tax on your gain is postponed.

When tax is due: Tax on the gain can be postponed if the exchange meets every Section 1031 requirement.
Who runs it: You run it, or you pay a manager to run it.
Who decides: You make the decisions, within the limits of your loans, your leases, and any co-owners.
Deadlines: Two deadlines, both starting the day your sale closes. Name the replacement property in writing within 45 days. Close on it within 180 days — or by your tax-return due date including extensions, if that is earlier.
Getting cash out: You can sell or refinance later. Neither is quick and neither is guaranteed.
What can go wrong: Vacancy, tenants who stop paying, financing terms, and closing on time. With one property, everything rides on that property.
Often considered by: Owners who want to keep making the decisions and can meet the deadlines.

1031 into a DST

You buy a fractional interest in real estate that a sponsor owns and manages. The trust holding it is a Delaware Statutory Trust, or DST.

When tax is due: Tax on the gain can be postponed, if the DST qualifies under Revenue Ruling 2004-86 and the exchange rules are met. Not every DST qualifies.
Who runs it: The sponsor runs the property. You do nothing day to day.
Who decides: Very little. Investors generally cannot direct leasing, refinancing, or when the property is sold.
Deadlines: The same 45-day and 180-day deadlines apply. Reviewing the offering and signing the subscription paperwork has to fit inside them.
Getting cash out: Hard to get out of. There is usually no market for your interest and no promised early exit.
What can go wrong: The property, the sponsor, the debt on it, and the fees all affect the outcome. It is a private security, so there is no public market and less disclosure than a listed investment. You can lose some or all of what you invest.
Often considered by: Investors who want to stop managing property and can accept limited control, fees, and no easy way out.

Installment sale

You sell and let the buyer pay you over time. At least one payment has to arrive in a year after the year you sell.

When tax is due: You report gain as the payments arrive, so the tax spreads across those years. Interest in each payment is taxed separately. Depreciation recapture may still be due in full in the year you sell.
Who runs it: Nothing to run. You hold a loan to the buyer instead of a building.
Who decides: You and the buyer negotiate the loan: the rate, the payment schedule, and what secures it.
Deadlines: No 45-day or 180-day clock. The sale and the loan documents still have to be structured correctly.
Getting cash out: Money arrives on the payment schedule. Selling the loan early can be difficult or expensive.
What can go wrong: The buyer may stop paying. What secures the loan may not cover what is owed. Interest rates, inflation, and how the deal is structured all matter.
Often considered by: Sellers willing to act as the bank and take payments instead of cash up front.

Qualified Opportunity Fund

You put an eligible gain into a fund that invests in designated Opportunity Zones. This is a separate set of tax rules, not a 1031 exchange.

When tax is due: Delayed, not erased. For a qualifying investment made on or before December 31, 2026, the gain is generally taxed for the 2026 tax year — sooner if you sell your fund interest or another inclusion event happens first. Investments made after 2026 follow different rules.
Who runs it: The fund manager runs everything.
Who decides: Usually limited. The fund documents set what you can and cannot do.
Deadlines: One clock, not two. An eligible gain generally has to be invested within 180 days, and the exact start date depends on how the gain arose.
Getting cash out: Usually locked up for years. Private-fund rules limit when you can get out.
What can go wrong: The fund, the projects it builds, the areas it builds in, and rules that may change. Getting out early is difficult.
Often considered by: Investors looking at a long hold who accept that the rules differ by the date they invest.

Sell outright

You sell without using Section 1031, pay whatever tax is due, and keep the rest.

When tax is due: Federal and state tax on the gain is generally due for the year you sell. The amount depends on your basis, depreciation, deductions, filing status, and other facts.
Who runs it: Nothing to run and nothing to buy.
Who decides: Full control of the money left after tax. No replacement property required.
Deadlines: No replacement-property deadline. Nothing has to be reinvested.
Getting cash out: Cash in hand after tax. No exchange rules limit what you do with it.
What can go wrong: Underestimating the tax bill. Whatever you do with the money afterward carries its own market and inflation risk.
Often considered by: Sellers who would rather have the cash than stay in real estate.

Tax results depend on basis, depreciation, debt, state law, ownership, transaction structure, dates, and other facts. Confirm the current rules with a CPA, tax attorney, and qualified intermediary before acting.

The tradeoffs of each path

1031 into your own propertyYou sell, then buy another property and run it yourself. Meet every Section 1031 requirement and the tax on your gain is postponed.

You pick the property and make every decision about it.
The 45-day and 180-day deadlines are firm. IRS relief can extend them in limited cases, such as a declared disaster.
How concentrated you end up depends on how many replacement properties you buy and what kind.

1031 into a DSTYou buy a fractional interest in real estate that a sponsor owns and manages. The trust holding it is a Delaware Statutory Trust, or DST.

No tenants, no repairs, no leasing calls.
The sponsor makes the decisions, and the fees built into the deal come out of your return.
It is a private security with no ready way to sell, so the offering documents carry the real terms.

Installment saleYou sell and let the buyer pay you over time. At least one payment has to arrive in a year after the year you sell.

Eligible gain can be spread across the years you get paid.
Depreciation recapture may still be due in full in the year you sell.
If the buyer stops paying, collecting is your problem.

Qualified Opportunity FundYou put an eligible gain into a fund that invests in designated Opportunity Zones. This is a separate set of tax rules, not a 1031 exchange.

It can take certain eligible gains that did not come from real estate, such as gain on stock.
Qualifying investments made on or before December 31, 2026 follow different rules from those made after it.
The tax result depends on which gain you use, when you invest, how long you hold, and what you report.

Sell outrightYou sell without using Section 1031, pay whatever tax is due, and keep the rest.

No exchange rules, no identification deadline, no replacement property.
Paying the tax now leaves less money to reinvest.
The money can go anywhere, not only into real estate.

Every DST offering in one directory

Active offerings with the sponsor behind each one, its filing history, reported leverage, and a source for every figure. Active means the offering is still open in the filings, not that units remain available.

Open the DST directory

Frequently asked questions

What is a 1031 exchange?

It is a trade of one investment or business property for another. When the trade meets every Section 1031 requirement, the gain is not taxed at the time of the exchange. The tax is postponed, not erased.

Can a DST count as my replacement property?

It can. An interest in a DST structured to match Revenue Ruling 2004-86 may qualify as replacement real property, provided the other Section 1031 requirements are met. Not every DST qualifies.

When do I pay tax in an installment sale?

You generally report the gain as the buyer pays you, so the tax spreads across those years instead of landing all at once. Interest in each payment is taxed separately. Depreciation recapture may have to be reported in the year of sale.

Is a Qualified Opportunity Fund a 1031 exchange?

No. It is a separate set of tax rules with its own deadlines and holding periods. Different statutory rules apply to qualifying investments made after December 31, 2026, and new zone designations begin January 1, 2027.