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Recapture vs 1031 Calculator

Selling taxable: §1250 recapture at 25% on depreciation + capital gain at 20% (federal) on the rest. 1031 exchange: defer everything for a small exchange fee. This calculator runs both scenarios side by side so you can quantify the tax savings of an exchange.

Sale price

Adjusted basis

Accumulated depreciation

Long-term capital gain rate

§1250 recapture rate (25%)

1031 exchange fees

Tax savings from 1031

$366,500

Tax owed if taxable sale

$372,500

Total realized gain

$1,700,000

§1250 recapture portion

$650,000

Capital gain portion

$1,050,000

1031 exchange fees

$6,000

How the math works

Compare taxable sale to 1031 exchange. Taxable sale: §1250 recapture on accumulated depreciation at 25% + capital gain on the rest at 20% (federal). 1031 defers everything at the cost of exchange fees (~$5-10K). Savings compound if you 1031 again at next sale.

NIIT (Net Investment Income Tax) adds 3.8% on top of capital gain rate for high earners. State tax adds 5-13% in most states. Total taxable-exit rate can reach 40%+ for high-income sellers in CA, NY, NJ.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

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 Recapture vs 1031 Calculator is built to give a quick, browser-based estimate for recapture vs 1031. Selling taxable: §1250 recapture at 25% on depreciation + capital gain at 20% (federal) on the rest. 1031 exchange: defer everything for a small exchange fee. This calculator runs both scenarios side by side so you can quantify the tax savings of an exchange. 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 recapture vs 1031 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 recapture vs 1031 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 sale price, adjusted basis, and accumulated depreciation.
Enter capital gain rate and §1250 recapture rate.
Enter 1031 exchange fees.
Read tax savings from exchange.

Frequently Asked Questions

Include state tax?

Add state rate on top of capital gain (CA 13.3%, NY 10.9%, etc.) and ordinary (for NIIT). For high-income sellers in high-tax states, total exit tax can reach 40%+. 1031 defers state tax in most states too.

NIIT?

Net Investment Income Tax = 3.8% additional on investment income for earners above $200K single / $250K joint. Applies to capital gain but not to §1250 recapture. 1031 defers the gain and thus NIIT.

1031 timeline reminder?

45 days to identify replacement, 180 days to close. Miss either and the exchange fails — full taxable sale treatment applies. Use a qualified intermediary.