Free like-kind tax-deferred exchange calculator
Enter the property values, boot, and adjusted basis — this §1031 tax-deferred exchange calculator shows realized gain, recognized gain, and your carryover basis in the replacement property, updated live, as you type.
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Does not include capital expenditures, vacancy surprises, or tax benefits. Consult a real estate professional for investment decisions.
Results are estimates. Consult a professional.
How the tax-deferred exchange calculator works
A like-kind (tax-deferred) exchange under IRC §1031 lets you sell investment or business property and reinvest the proceeds into a replacement property without immediately recognizing capital-gains tax. The gain is deferred — not forgiven — and transfers into the cost basis of the new property. This calculator computes your realized gain, how much of it must be recognized now (if you receive boot), and the adjusted basis you carry forward into the replacement asset.
Boot is any non-like-kind property you receive in the exchange — cash, debt relief in excess of debt assumed, or personal property. Boot triggers immediate recognition of gain equal to the lesser of the boot received or your total realized gain. You can offset boot by paying additional cash or taking on extra mortgage debt on the replacement property.
IRS — Like-Kind Exchanges Under IRC §1031 (ATG); Publication 544.Worked example: rental property exchange with boot
You sell a rental property with an adjusted basis of $200,000 for a replacement property worth $500,000. The deal also nets you $75,000 cash (boot). Your old mortgage of $100,000 is assumed by the buyer; you assume the seller's $125,000 mortgage.
Recognized vs. deferred gain by boot amount — $500k property, $200k basis
The table below holds the relinquished property FMV at $500,000 and the adjusted basis at $200,000 (realized gain = $300,000) and varies only the boot received. It shows how much gain is recognized immediately and how much is deferred.
| Boot received | Recognized gain | Deferred gain | New basis |
|---|---|---|---|
| $0 | $0 | $300,000 | $200,000 |
| $25,000 | $25,000 | $275,000 | $200,000 |
| $75,000 | $75,000 | $225,000 | $200,000 |
| $150,000 | $150,000 | $150,000 | $200,000 |
| $300,000+ | $300,000 | $0 | $200,000 |
Source: IRS §1031; IRS Publication 544. New basis formula: old basis − boot received + boot paid + recognized gain.
Tips for completing a §1031 tax-deferred exchange
A §1031 exchange has strict IRS timing rules that cannot be extended except in federally declared disasters. Missing either deadline collapses the exchange and the entire gain becomes taxable in the year of sale.
- Hit the 45-day identification window. You must identify potential replacement properties in writing to your qualified intermediary within 45 calendar days of closing on the relinquished property. Weekends and holidays count.
- Close within 180 days. The replacement property must be purchased within 180 calendar days of the relinquished property's closing (or the tax-return due date for that year, whichever is earlier).
- Use a qualified intermediary (QI). You cannot receive the sale proceeds yourself — even briefly. A QI must hold the funds between transactions. Using a disqualified person (attorney, CPA, agent) voids the exchange.
- Minimize boot to maximize deferral. To defer 100% of gain: trade equal or up in value, replace all equity (reinvest all cash), and assume equal or greater debt on the replacement property.
- Remember: deferred, not forgiven. The gain follows the basis into the replacement property. A future taxable sale triggers recognition — unless you do another §1031 exchange, or you hold the property until death and heirs receive a stepped-up basis under IRC §1014.
Accuracy and limitations
This calculator applies the standard §1031 gain and basis formulas as published in IRS Publication 544. It handles boot in the form of cash or net debt relief and produces results consistent with IRS Form 8824 (Like-Kind Exchanges). It does not model depreciation recapture under §1250 (taxed at up to 25% as ordinary income) or the 3.8% Net Investment Income Tax (NIIT) that may apply on recognized gain above certain thresholds — both of which can increase the tax cost of boot significantly.
Not tax or legal advice. §1031 exchanges involve complex federal and state rules, qualified-intermediary contracts, title and escrow coordination, and basis-tracking requirements that span multiple years. State tax treatment varies — some states do not conform to federal §1031 deferral. Always work with a licensed CPA and a qualified intermediary before executing an exchange. This tool is educational only.
§1031 exchange terms defined
About this tax-deferred exchange calculator
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