1031 Exchange Calculator

Advanced 1031 Exchange Calculator

1031 Exchange Calculator

Calculate tax deferral benefits for your property exchange

Property Details
Tax Rates
Calculation Results
Net Adjusted Basis
$0
Capital Gain
$0
Depreciation Recapture (25%)
$0
Federal Capital Gains Tax
$0
State Capital Gains Tax
$0
Total Taxes Due
$0
Gross Equity
$0
After-Tax Equity
$0
Sale Reinvestment (After-Tax × 4)
$0
Exchange Reinvestment (Gross × 4)
$0

1031 Exchange Rules

45-Day Identification Period: You must identify potential replacement properties within 45 days of selling your relinquished property.
180-Day Purchase Period: You must complete the purchase of replacement property within 180 days of sale.
Equal or Greater Value: To defer all taxes, the replacement property must be of equal or greater value and all equity must be reinvested.

This calculator provides estimates only. Consult a qualified intermediary or tax professional for specific advice.



What is a 1031 Exchange?

A Section 1031 Exchange (named after the IRS tax code) allows real estate investors to:

  • Sell an investment property

  • Reinvest proceeds into a "like-kind" property

  • Defer 100% of capital gains taxes (Federal + most state taxes)

Key Rules & Requirements

  1. 45-Day Identification Period: Must identify replacement property within 45 days of sale

  2. 180-Day Closing: Must complete purchase within 180 days of sale

  3. Equal or Greater Value: Replacement property must be of equal or higher value

  4. Reinvestment of All Proceeds: All sale proceeds must go into new property

  5. Like-Kind Property: Both properties must be investment/business real estate

1031 Exchange Calculator

This tool helps estimate:

  • Tax deferral amount

  • Required reinvestment

  • Potential cash flow differences

Inputs Needed:

  1. Sale Price of Relinquished Property

  2. Original Purchase Price

  3. Accumulated Depreciation

  4. Mortgage Balance (if any)

  5. Estimated Replacement Property Price

Example Calculation:

ParameterAmount
Sale Price$500,000
Original Purchase Price$300,000
Accumulated Depreciation$50,000
Mortgage Balance$200,000
Replacement Property Price$600,000

Calculations:

  1. Capital Gain: $500,000 - $300,000 = $200,000

  2. Depreciation Recapture: $50,000

  3. Total Taxable Gain Without 1031: $250,000

  4. Estimated Taxes Deferred (20% capital gains + 25% depreciation recapture): ~$62,500

  5. Required Reinvestment: $500,000 (all proceeds must be reinvested)

Benefits of a 1031 Exchange

✔ Tax Deferral: Potentially save tens/hundreds of thousands in taxes
✔ Wealth Building: More capital remains invested
✔ Portfolio Upgrade: Move into better properties
✔ Estate Planning: Possible step-up in basis at death

Common Mistakes to Avoid

❌ Missing strict 45/180 day deadlines
❌ Taking "boot" (cash or non-like-kind property)
❌ Using personal residence (not allowed)
❌ Poor replacement property identification