Finance category
Mortgage, loan, investing, tax, and money calculators.
1031 Exchange Calculator
Pressure-test a like-kind exchange before you list the relinquished property. Estimate realized gain, depreciation recapture, recognized boot, and the minimum replacement price and debt you need to fully defer capital gains tax.
Relinquished property
Replacement property
Tax rates
Tax deferred by exchange
$65,644
vs $91,872 if sold outright
Realized gain
$306,500
Basis: $281,000
Recognized (taxable) gain
$87,500
Boot: $87,500
Deferred gain
$219,000
Exchange safety check
Replacement falls short of the full reinvestment rules. Expect taxable boot equal to the shortfall — trading down in price, cash, or debt all trigger recognized gain.
Minimum replacement price
$587,500
to defer all gain
Minimum replacement debt
$210,000
matches relinquished loan
Cash that must be reinvested
$377,500
net proceeds after debt
Cash boot
$87,500
proceeds not reinvested
Debt reduction boot
$0
mortgage trade-down
Depreciation recapture
$72,000
taxed at 25% if recognized
Tax bill if sold outright
Estimates are directional. Actual exchange rules require a qualified intermediary, 45-day identification window, 180-day closing, and like-kind investment property on both sides. Confirm adjusted basis and depreciation with your tax professional before closing.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This 1031 Exchange Calculator is built to give a quick, browser-based estimate for 1031 exchange. Pressure-test a like-kind exchange before you list the relinquished property. Estimate realized gain, depreciation recapture, recognized boot, and the minimum replacement price and debt you need to fully defer capital gains tax. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the 1031 exchange result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this 1031 exchange estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter the sale price, selling costs, and mortgage payoff for the relinquished property.
- Add the original purchase price, capital improvements, and accumulated depreciation to compute adjusted basis.
- Enter the replacement property purchase price, new loan, and qualified intermediary expenses.
- Set your federal capital gains rate, state rate, and net investment income tax so the deferred tax is specific to your situation.
- Review the minimum replacement price, debt, and cash reinvestment thresholds — falling short triggers taxable boot.
Frequently Asked Questions
What is a 1031 exchange?
A 1031 exchange lets an investor defer federal capital gains tax and depreciation recapture by swapping one investment property for another of like kind. The seller never takes constructive receipt of the proceeds — a qualified intermediary holds the funds between closings.
How do I fully defer tax?
Three tests: (1) the replacement property purchase price must equal or exceed the relinquished sale price, (2) all net cash proceeds must be reinvested, and (3) the debt on the new property must equal or exceed the old debt (or be offset by additional cash). Falling short on any test creates taxable boot.
What is boot?
Boot is the portion of the exchange that becomes taxable. Cash boot is proceeds the investor pockets. Debt boot is the reduction in mortgage liability between properties. Recognized gain equals the lesser of realized gain and total boot.
Does the 25% depreciation recapture rate apply inside the exchange?
A fully deferred 1031 defers both capital gains and depreciation recapture. But any recognized gain is taxed first as depreciation recapture at up to 25% until the recapture amount is exhausted, then at the capital gains rate on the remaining recognized gain.
What are the 45-day and 180-day rules?
The taxpayer has 45 calendar days after closing the relinquished property to identify up to three replacement candidates in writing, and 180 calendar days to close on one of them. Missing either deadline collapses the exchange and the full gain becomes taxable.
Related Calculators
Seller Net Sheet Calculator
Estimate net proceeds from the relinquished sale — the pool of cash the qualified intermediary will hold.
Cap Rate Calculator
Compare property income performance between the relinquished and replacement deals before locking in the swap.
DSCR Calculator
Check whether a replacement property can carry the new debt under a DSCR loan.
Rental Cash Flow Calculator
Model post-exchange rental cash flow on the replacement property before completing the exchange.
Rental Property Calculator
Underwrite the replacement property top to bottom with NOI, cap rate, and cash-on-cash return.
Real Estate Depreciation Calculator
Size the depreciation recapture exposure the 1031 would defer on the relinquished property.
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