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1031 exchange calculator

Estimate how much gain and tax a 1031 exchange puts off, whether any of it is taxable boot, and the 45- and 180-day deadlines in plain words.

Property you're selling
$
$
$
Your cost basis
$
$
$
Replacement property
$
$
Tax rates
%
%
%
Tax deferred
$72,800

Fully deferred: you reinvest all the cash and replace all the debt.

Deferred gain
$324,000
Tax due now
$0.00
Cash boot
$0.00
Mortgage boot
$0.00
Amount realized
$564,000
Adjusted basis
$240,000
Realized gain
$324,000
Exchange cash (held by intermediary)
$364,000
Equity into replacement
$364,000
Extra cash you add
$0.00
Tax without an exchange
$72,800
Replacement property basis
$476,000

Deadlines, counted from the day the sale closes

  1. Day 45: identify replacement properties in writing (usually up to three).
  2. Day 180: close on the replacement, or by your tax return due date if that comes first.

Both run at the same time and are not extended for weekends or holidays.

Tax deferred$72,800

How this is calculated

  1. 1Amount realized = sale price − selling costs. Adjusted basis = original price + improvements − depreciation. Realized gain = amount realized − adjusted basis.
  2. 2Exchange cash = amount realized − mortgage paid off; a qualified intermediary holds it. Equity into replacement = replacement price − new loan.
  3. 3Cash boot = exchange cash not put into the replacement. Mortgage boot = debt paid off minus new debt, reduced by any extra cash you add. Both are taxable.
  4. 4Recognized gain = the smaller of total boot and realized gain. Deferred gain = realized gain − recognized gain.
  5. 5Tax on a gain = depreciation portion × recapture rate + the rest × capital gains rate + the whole gain × state rate. Tax deferred = tax on a plain sale − tax on the recognized gain.
  6. 6Replacement basis = replacement price − deferred gain, so the deferred gain carries into the new property.

A simplified estimate. Not included: the 3.8% net investment income tax, state rules that differ from federal, partial-year depreciation, related-party rules, and reverse or improvement exchanges. Both properties must be held for investment or business use, and you can't touch the cash. Work with a qualified intermediary and a tax professional before you sell.

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Frequently asked questions

What are the 45-day and 180-day deadlines?
After you sell, you have 45 days to identify replacement properties in writing and 180 days to close on them (or until your tax return is due, if that's sooner). Missing either deadline usually makes the gain taxable.
What is boot?
Anything you receive in the exchange that isn't like-kind property, such as cash you keep or a smaller loan on the new property than the old one. Boot is taxable.
Do I need to take on as much debt as I paid off?
To defer all the tax, buy a property worth at least what you sold and reinvest all the cash. A smaller new loan can be offset by adding cash of your own.
Can I exchange into a home I'll live in?
No. Both properties must be held for investment or business use. Moving into the replacement property right away doesn't qualify.
Is the tax gone forever?
No, it's deferred. It's due when you sell without another exchange. Under current law, heirs who inherit the property generally get a stepped-up basis, which can erase the deferred gain.