Portfolio Rebalancing Tax Cost Calculator

Rebalancing triggers tax on gains.

Sale value

Tax basis

Effective tax rate %

1031 deferral savings %

Tax cost (straight sale)

$2,700,000

1031 savings

$2,295,000

Gross gain

$9,000,000

How the math works

Gain = sale − basis. Tax = gain × rate. 1031 savings = tax × deferral %.

$15M − $6M = $9M gain × 30% = $2.7M tax. 1031: save 85% = $2.3M deferred. Major value preserved.

How to Use

Enter sale value.
Enter tax basis.
Enter effective rate %.
Enter 1031 alternative savings %.
Read tax cost and 1031 advantage.

Frequently Asked Questions

Why rebalance?

Concentration risk reduction. Capital need. Market timing (sell over-priced, buy under-priced). Estate planning. Tax planning. Each requires balancing post-tax return vs pre-tax rebalancing benefit.

Tax drag?

Long-term cap gain + recapture: typically 25-35% combined (federal + state). On $10M gain: $2.5-3.5M tax. $10M sale at 35% effective → $6.5M deployable = reduced by tax drag. 1031 exchange defers; QOZ eliminates long-term.

Alternatives?

1031 exchange: defer tax, rebalance through exchange. QOZ: defer + eliminate (10-year hold). Partial sale: spread realization. Charity (CRT): discount. Each tailored to investor tax profile.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.