Free 1031 exchange calculator
Estimate your 1031 exchange tax deferral — enter realized gain, boot received, and adjusted basis to see recognized gain and deferred tax, 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 1031 exchange calculator works
A 1031 exchange lets you sell an investment property and roll the proceeds into a replacement property while deferring federal capital gains tax. The calculator applies three formulas from IRS §1031 to determine how much gain is deferred, how much (if any) is taxable now, and what your new cost basis becomes.
Boot is any non-like-kind value you receive in the exchange — cash, debt relief, or personal property. Every dollar of boot received triggers that same dollar of recognized (taxable) gain, up to your total realized gain. Receiving zero boot and buying up in value is the cleanest path to full deferral.
IRS — Like-Kind Exchanges Under IRC Section 1031 (Publication 544, Chapter 1).Worked example: selling a rental and buying up
You sell a rental property for $600,000. Your adjusted basis (original cost + improvements − depreciation taken) is $300,000. You use all proceeds through a qualified intermediary to purchase a replacement property for $650,000, paying $50,000 of additional cash at closing. No boot is received.
Recognized gain by boot received — $500k sale, $250k basis
The table below shows how much gain becomes taxable depending on how much boot you receive, for a $500,000 sale price with a $250,000 adjusted basis (realized gain = $250,000). Keeping boot to zero keeps the full gain deferred.
| Boot Received | Realized Gain | Recognized (Taxable) Gain | Gain Deferred |
|---|---|---|---|
| $0 | $250,000 | $0 | $250,000 |
| $25,000 | $250,000 | $25,000 | $225,000 |
| $75,000 | $250,000 | $75,000 | $175,000 |
| $150,000 | $250,000 | $150,000 | $100,000 |
Source: IRS §1031, IRS Publication 544. Recognized gain cannot exceed realized gain.
Tips for a clean 1031 exchange
The mechanics are strict: missing any deadline or touching the proceeds yourself disqualifies the exchange and makes the full gain taxable immediately. Plan every step before the relinquished property closes.
- Hire a qualified intermediary before closing. A QI holds the proceeds throughout. You may never take constructive receipt of the funds — doing so collapses the exchange on the spot.
- Meet the 45-day identification deadline. You have 45 calendar days from the date you close the relinquished property to identify up to three replacement properties in writing. This clock does not stop for weekends or holidays.
- Close within 180 days. The replacement property purchase must close within 180 calendar days of selling the relinquished property (or by your tax return due date, whichever is earlier).
- Avoid boot if you want full deferral. Trading down in price, receiving cash at closing, or being relieved of more debt than you assume are all forms of boot. Structure the deal so you buy equal or greater in value.
- Track depreciation recapture separately. Deferred gain includes §1250 depreciation recapture (taxed up to 25%), which is separate from long-term capital gain (taxed at 0%, 15%, or 20%). A CPA should model both layers before you list the property.
Accuracy and limitations
This calculator applies the §1031 formulas mechanically — it cannot account for state tax rules (some states do not conform to federal deferral), depreciation recapture, installment-sale overlap, or partial-use scenarios such as a property that was both primary residence and rental. Results are estimates only.
Not tax or legal advice. A 1031 exchange is one of the most rule-bound transactions in the tax code. You must engage a qualified intermediary, a CPA experienced in real estate taxation, and a real estate attorney before proceeding. The 45-day identification and 180-day closing deadlines are absolute — missing either disqualifies the exchange. Consult qualified professionals for your specific situation.
1031 exchange terms defined
About this 1031 exchange calculator
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