1031 Exchange Calculator
A like-kind exchange defers a great deal — and boot quietly makes part of it taxable anyway. Here is the split.
What This Calculator Does
Selling outright is set against exchanging: the calculator estimates the gain and depreciation recapture a straight sale would expose, then shows how much of that liability a properly structured 1031 defers and how much becomes taxable as boot should you take cash out or reduce your debt.
Who Is This For
Suited to owners of investment or rental property trading up, out-of-state investors consolidating into South Florida, and anyone who has been told to just do a 1031 and wants the mechanics and the deadlines in front of them first.
How It Works
Supply your original purchase price, the depreciation taken, your sale price and selling costs, then the price and debt on the replacement property. The calculator returns the deferred amount, any boot created, and the two deadlines you are obliged to meet.
Frequently Asked Questions
What does a 1031 exchange do?
It allows you to defer tax on the gain from an investment property by rolling the proceeds into another one. The tax is deferred rather than erased — it travels with your basis into the new property until you eventually sell without exchanging.
How do the 45-day and 180-day clocks run?
From the day your sale closes you have 45 days to identify replacement property in writing and 180 days to close on it. Both clocks run at the same time rather than one after the other, and both count calendar days. Missing either one collapses the exchange.
Must a qualified intermediary be involved?
Yes. The proceeds have to pass to a qualified intermediary and must never touch your hands or your account. Constructive receipt of the money disqualifies the exchange, which is why the intermediary is engaged before closing rather than after.
What exactly counts as boot?
Anything received in the exchange that is not like-kind property. Cash boot is proceeds you keep. Mortgage boot appears where the debt on the replacement property falls below the debt you paid off, since that relief counts as value received. Either form is taxable to the extent of your gain.
Does my own home qualify?
It does not. Section 1031 covers property held for investment or productive use in a business. A primary residence falls outside it, though it enjoys its own exclusion under separate rules. A rental or investment condo does qualify.
What becomes of the depreciation?
Depreciation recapture is deferred alongside the capital gain, and your basis carries across into the replacement property. That lower basis means smaller depreciation deductions from then on, which forms part of the trade you are making. Work through it with your CPA before the sale closes, not afterward.