1031 Exchange Calculator
Full deferral needs equal-or-greater value, not just a like-kind swap
1031 Exchange Calculator
$
$
$
$
Total gain (incl. depreciation recapture)
0
Tax due if you sell outright (no exchange)
0
25% recapture + 20% LTCG, simplified
Tax deferred via a qualifying 1031 exchange
0
Full deferral needs equal-or-greater value AND full reinvestment
To defer 100% of the gain, the replacement property must be worth at least as much as what you sold, and ALL the net sale proceeds must go into the replacement — any cash you pull out ("boot") is taxable immediately, even within an otherwise qualifying exchange.
1031 defers, it doesn't eliminate
The deferred gain carries forward into the replacement property's tax basis — if you eventually sell without another exchange, that deferred tax comes due (though a step-up in basis at death can eliminate it entirely for heirs, a common long-term "swap until you drop" strategy).
The 45/180-day clock is strict and unforgiving
You must identify replacement property within 45 days of the sale and close within 180 days — both deadlines are calendar-day counts with essentially no extensions, and using a qualified intermediary to hold proceeds is mandatory to keep the exchange valid.
Tax-if-sold is a simplified estimate: unrecaptured Section 1250 depreciation recapture at a flat 25%, and the remaining gain (sale price minus original basis minus recaptured depreciation) at a flat 20% long-term capital gains rate — ignoring the Net Investment Income Tax (an additional 3.8% for many investors), state taxes, and your specific bracket. The 1031 exchange must satisfy strict like-kind, timing (45-day identification, 180-day closing), and full-reinvestment requirements to defer the full amount shown; partial reinvestment or "boot" received reduces the deferral proportionally. Not tax advice — use a qualified intermediary and a CPA experienced with 1031 exchanges.