Six true or false statements
Are four or five of these true for you?
Tick each one that is true. Takes under a minute.
0 of 6 true.
How much could it save? Run your numbers
| Plan | Heirs keep | vs hold and pay | Estate tax |
|---|
| What each path earns a year, after tax | Per year | Inside the taxable estate? |
|---|
Does it still win if death comes early or late?
| If death comes at | Odds it has happened by then | Best plan vs hold and pay | Premiums paid |
|---|
How it scores: what your heirs keep after income tax, estate tax (federal and state) and debt, plus any life insurance death benefit held by an irrevocable life insurance trust (ILIT).
The federal exemption is $15,000,000 per person in 2026 (P.L. 119-21), indexed by chained CPI from 2027 (about $15,460,000), then 2.5% a year; married couples use portability. Policy prices are estimates from published carrier rates and October 2026 carrier illustrations for a no-lapse universal life policy, not a quote; final pricing needs underwriting.
Suspended losses are freed only by a fully taxable sale of the whole activity (IRC 469(g)) and are mostly lost at death. Notes over $5,000,000 carry the Section 453A interest charge. Policy prices for 10, 15 and 20 year pay are scaled estimates; lifetime pay is the published-rate basis.
The note is a fixed 6% stream, not an index fund, with no allowance for the credit risk of the buyer or insurer behind it, liquidity or fees. A note still owed at death is income in respect of a decedent: no step-up, and the heirs owe the income tax on the deferred gain.
The 2027 figure is our estimate (IRS not yet published). Results are projections, not promises; a death benefit depends on premiums being paid and the insurer's ability to pay.
Hans Goldstein is an Enrolled Agent and a licensed life insurance agent (CA #4273294) who may earn a commission on a policy; he is not licensed to sell securities and does not recommend investments. Education only, not tax, legal, investment or insurance advice.
Why these six
A 1031 exchange defers the income tax on a sale, but it carries your basis and your risk into the next property. When the next property grows slowly, the rent is thin, and the family will owe estate tax, the deferral can be worth less than it looks. The step-up in basis at death already erases the deferred income tax, so the estate tax is the bill that remains.
What the calculator compares
The calculator below runs the same sale through a 1031 exchange, an installment sale, holding until death, buy-borrow-die and an estate plan with a trust, using your state, ages and growth rate. It also counts cash flow and suspended passive losses. See also the side-by-side comparison and the free book.
What this page does not tell you
Results are projections at one steady growth rate, not promises. Real estate in a given city can grow faster or slower. Premiums and costs are estimates from published rate tables, not offers.
Passive losses are released only when an entire activity is sold, and installment interest is taxed. Hans Goldstein is also a licensed life insurance agent (CA Insurance License #4273294) and may earn a commission if you buy a policy through him; he is not licensed to sell securities and does not recommend any investment. Education only. Not tax, legal, investment or insurance advice.
What to know
The checklist is a screen, not advice. The calculator uses one engine for all strategies, 2026 law and your inputs. Laws change, and a CPA should confirm any plan.
Your Big Sale Options
One page, eleven paths: cash, installment sale, 1031, Delaware statutory trust, Opportunity Zone, charitable remainder trust, Section 121, QSBS, loss harvesting, bracket timing and moving states. What each does, who it fits, the trade-off, liquidity and the 2026 rule, plus four questions for your CPA.
Frequently asked questions
Is a 1031 exchange ever a bad idea?
Does the step-up in basis erase the deferred tax?
Where is the calculator?
Sources
- IRC 2010, unified credit and indexing (Cornell LII)
- IRC 2503(b), annual exclusion (Cornell LII)
- IRC 2042, life insurance in the gross estate (Cornell LII)
- IRC 2642, GST inclusion ratio (Cornell LII)
- IRS Rev. Proc. 2025-32 (2026 amounts)
Updated November 7, 2026. Education only, not legal or tax advice.
Keep comparing
Estate tax strategy calculator
Hold and pay, 1031, borrow, sell or an installment sale with an ILIT: which leaves your heirs the most, and when the answer is a slam dunk.
ReadILIT + life insurance estate tax calculator
Estate tax with no plan next to an ILIT funded by a universal life policy: what your heirs keep, the premium, and the annual gift math.
ReadStep-up at death (hold)
Holding an appreciated asset until death can erase the built-in gain for heirs; here is when that beats selling now and when it does not.
Read1031 exchange
Defer the whole gain by trading investment real estate for more real estate, if you can find it and close inside 180 days.
ReadInstallment sale (Section 453)
Report the gain as the buyer pays you instead of all in the year of sale, under rules that have been in the tax code for decades.
ReadKnow your number before you sign.
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You talk to Hans Goldstein. Enrolled Agent, admitted to practice before the IRS.