1031 Exchange Calculator
Estimate the capital gains tax you'll defer, calculate your boot, and verify your replacement property requirements.
🏠 Property Being Sold
Relinquished property
Adds to basis; reduces taxable gain
Total claimed since purchase
Agent commissions + closing costs
🏢 Replacement Property
Property being purchased
🧾 Tax Rates
Enter 0 if no state income tax
Partial deferral — ~$38,800 in boot tax owed
Boot detected: $194,000. Increase replacement property value or equity to fully defer.
Tax Deferral Summary
Tax If Sold Normally
$85,300
Tax Deferred via 1031
$46,500
Boot Tax Owed
$38,800
Gain Breakdown
Sale Price
$800,000
Selling Costs (7%)
−$56,000
Adjusted Basis
Cost + Improvements − Depreciation
−$330,000
Realized Gain
$414,000
Depreciation Recapture
Taxed at 25% federal
$50,000
Capital Gain
Taxed at 20.0%
$364,000
Depreciation Recapture Tax
$12,500
Capital Gains Tax
$72,800
Total Tax (if sold normally)
$85,300
1031 Requirements Checklist
Replacement property value ≥ net sale price
Need ≥ $744,000 · Buying $900,000
New debt ≥ relinquished debt (or make up difference in cash)
Old mortgage: $250,000 · New mortgage: $600,000
No boot (all equity reinvested)
Boot detected: $194,000 — reduces deferral
Identify replacement within 45 days of closing
Can identify up to 3 properties; must close by day 180
Close on replacement within 180 days of sale
Both 45-day ID and 180-day close are hard deadlines — no extensions
Use a Qualified Intermediary (QI)
You cannot touch the sale proceeds — they must go directly to your QI
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Tax disclaimer: This calculator provides estimates for educational purposes only and does not constitute tax or legal advice. 1031 exchange rules are complex and fact-specific. Always consult a qualified tax professional or CPA before executing a 1031 exchange.
1031 Exchange FAQs
What is a 1031 exchange?
A 1031 exchange (named after Section 1031 of the IRS tax code) lets real estate investors defer capital gains taxes when they sell a property, as long as they reinvest the proceeds into a 'like-kind' replacement property within strict time limits. The tax isn't eliminated — it's deferred until you eventually sell without doing another exchange.
What is 'boot' in a 1031 exchange?
Boot is any non-like-kind property received in an exchange — most commonly cash you pocket or a reduction in mortgage debt (debt relief). Boot is taxable in the year of the exchange. To avoid boot: your replacement property must be equal or greater in value AND you must take on equal or greater debt (or make up the difference with additional cash).
What are the key 1031 exchange deadlines?
Two hard deadlines: (1) 45-Day Identification Rule — you must identify potential replacement properties in writing within 45 days of closing on your relinquished property. (2) 180-Day Exchange Period — you must close on the replacement property within 180 days. These deadlines cannot be extended and run simultaneously from the closing date of your sale.
What qualifies as 'like-kind' property?
For real estate, 'like-kind' is broad — any real property held for investment or business use qualifies, as long as it's in the United States. You can exchange a single-family rental for an apartment building, a commercial warehouse for vacant land, or a retail strip for a portfolio of rentals. Your primary residence does NOT qualify.
What happens to depreciation in a 1031 exchange?
When you exchange, your adjusted basis (original cost minus depreciation taken) carries over to the new property. This means you start depreciating the replacement property from a lower basis. When you eventually sell without exchanging, the IRS recaptures all depreciation taken on both properties at 25%. Cost segregation on the new property can accelerate deductions and offset some of this.