Is structured annuity available to residential people who are also looking to protect and preserve their assets?

Leigh Thomas Brown

The house they paid $12,000 for is now worth 1.2 million

4 Jul 2026 · 1 min

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1:03

In this brief dialogue, Speaker A describes a couple who bought a home for $12,000 decades ago, which is now worth $1.2 million as a teardown. Because the sale price far exceeds the federal primary‑residence capital‑gains exclusion and the property is not an investment, a 1031 exchange is unavailable. Speaker A asks whether a structured annuity (structured installment sale) can be used to preserve assets for residential owners in this situation. Speaker B confirms that structured installment sales are permissible for any residence. The response outlines the steps: first apply the primary‑residence exclusion (up to $250 k for single filers or $500 k for joint filers), then treat the remaining appreciation as capital gain, which can be deferred through a structured installment sale. This provides a tax‑deferral and asset‑preservation strategy for homeowners whose properties have appreciated far beyond the exemption limits.

Questions this video answers

Yes, it is actually. When you deal with residential property, you name it as a residence, apply the primary‑residence exemption (up to $500,000 for joint filers), and then the remaining capital gain can be handled through a structured installment sale.

Chapters

They're working with a different grandma and grandpa who have been in their same lovely brick ranch for the last 60 years. And that house that they paid $12,000 for is now worth $1.2 million as a teardown. They're outside of their capital gains exemptions when it comes to federal law, and it's not an investment, so they can't do a 1031. Is structured annuity available to residential people who are also looking to protect and preserve their assets?
Yes, it is actually. When you deal with residential property, and that would include any residence, you just name it as a residence, the first thing you would have is your exemption. So whether that be a single taxpayer or joint taxpayer, so you get past that exemption, of course for joint you're talking about $500,000. So once you, you coordinate that and once you're past that, You're moving into capital gain territory for any growth. All of that is available for use with the structured installment sale.