1031 exchange calculator

How much of your gain defers, how much becomes taxable boot, and the two deadlines that cannot be extended. Every rule applied here is cited below, because this is the calculator on the site where being confidently wrong costs the most.

Sale priceWhat the property you are giving up sells for.

Selling costsCommission, title, escrow, transfer tax.

Adjusted basisWhat you paid, plus capital improvements, minus depreciation taken.

Accumulated depreciationDepreciation you have already deducted. Taxed at a higher rate than capital gain.

Replacement property priceBuy for less than the net sale price and the difference is taxable boot.

Debt paid off on the saleOptional. The mortgage cleared at closing.

Debt taken on with the replacementTake on less debt than you cleared and the difference is mortgage boot.

Date the sale closedSets your 45-day and 180-day deadlines.

Your federal long-term capital gains rate

0%Taxable income up to $48,350 filing single.15%Taxable income up to $533,400 filing single.20%Taxable income above that.

Does the Net Investment Income Tax apply to you?

NoYesAdds 3.8% above the modified adjusted gross income thresholds.

Your marginal ordinary income rateOptional. Caps the depreciation recapture rate when it is below 25%.

Combined state tax rateOptional. States treat exchanges differently — check yours.

Gain, boot and deferral

Sale price

—

Selling costs

—

Net sales price

—

Adjusted basis

—

Realized gain

—

Cash boot

—

Mortgage boot

—

Total boot

—

Gain recognized now

—

Gain deferred

—

Enter the sale price and your adjusted basis to calculate the gain.

This is an estimate, not tax advice. A 1031 exchange has strict requirements this calculator does not check: the proceeds must go to a qualified intermediary and never to you, the property must be held for investment or business use, and the deadlines above cannot be extended. Reverse exchanges, improvement exchanges, related-party sales and state clawback rules are all outside what this tool models. Speak to a qualified intermediary before you list, and to a CPA before you file.

Boot is what makes an exchange partly taxable

The IRS puts it plainly: "If, as part of the exchange, you also receive other (not like-kind) property or money, you must recognize a gain to the extent of the other property and money received. You can't recognize a loss." (IRS, Like-kind exchanges — real estate tax tips)

Boot arrives two ways. Cash boot is what is left over when the replacement property costs less than the net sale price.Mortgage boot is the debt you cleared that you did not replace — and it is the one that surprises people, because it is taxable even when every dollar of cash went back into the new property.

Recognized gain is then the smaller of your realized gain and your total boot, never below zero — the rule Form 8824 states as "enter the smaller of line 15 or line 19, but not less than zero" (IRS, Instructions for Form 8824).

The two deadlines, and what people get wrong about them

You have 45 days from transferring the property you gave up to identify replacements in writing, and 180 days to close. Both run from the same day — the sale — which is the detail most often misread.

180 days is not 180 days after the 45-day deadline. It is 180 days after the sale.
180 days is not six months.
It can be shorter still: the limit is the earlier of the 180th day and your tax return's due date including extensions.

Both figures are from the Instructions for Form 8824, which is also the form that reports the exchange.

Why depreciation is taxed separately

Any gain you do recognize is not all taxed at one rate. Depreciation you previously deducted comes back first as unrecaptured section 1250 gain, taxed at a maximum 25% rate, and only what is left is taxed at your long-term capital gains rate (IRS, Topic 409). The calculator applies the recapture rate first for exactly that reason, and caps it at your ordinary rate when yours is lower.

Only real property qualifies

Since the 2017 tax act, "exchanges of machinery, equipment, vehicles, artwork, collectibles, patents and other intellectual property and intangible business assets generally do not qualify for non-recognition of gain or loss as like-kind exchanges" (IRS).