1031 Exchange Calculator
Calculate your potential tax savings from a tax deferred exchange under IRC Section 1031.
Tax Deferred with 1031 Exchange
$47,318
Potential savings worth exploring
Without 1031
$47,318
Total tax owed
With 1031
$0
Fully deferred
Tax Breakdown
Sale Price$500,000
Less: Selling Costs (6%)-$30,000
Net Sale Proceeds$470,000
Original Purchase Price$300,000
Less: Accumulated Depreciation-$87,270
Adjusted Basis$212,730
Total Gain$257,270
Depreciation Recapture (25%)$87,270
Capital Gain (15%)$170,000
Recapture Tax$21,818
Capital Gains Tax$25,500
Total Tax (No Exchange)$47,318
Key 1031 Exchange Rules
- • 45-day identification period -- you must identify replacement properties within 45 days of selling
- • 180-day closing deadline -- you must close on the replacement property within 180 days
- • Must be "like-kind" -- real estate for real estate (residential, commercial, or land all qualify)
- • Cannot be personal use property -- primary residences and vacation homes do not qualify
Rough illustration using flat rates (25% recapture, 15% capital gains, 20% boot) and straight-line 27.5-year depreciation. Your actual tax depends on your bracket, asset mix (5/7-year personalty recaptures as ordinary income), and state — SheltrIQ computes the exact figures when you record a sale. Not tax advice; review with a CPA.
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Frequently asked questions
What are the 45-day and 180-day deadlines in a 1031 exchange?
After you sell your relinquished property, you have 45 calendar days to formally identify potential replacement properties in writing, and a total of 180 calendar days to close on one of them. Both clocks start on the closing date of the sale and run concurrently — the 180-day window is not an extension of the 45-day window. Missing either deadline disqualifies the exchange and makes the full gain taxable.
Does a 1031 exchange eliminate my taxes or just defer them?
It defers them — it does not erase them. Your old basis carries over into the replacement property (adjusted for any additional cash invested), so the deferred depreciation recapture and capital gain stay with the new property until you eventually sell without exchanging. This estimate shows the tax you would defer today, not a permanent forgiveness.
What is "boot" and why is it taxable?
Boot is any value you receive in the exchange that is not like-kind real estate — most commonly cash from trading down to a cheaper replacement property, or debt relief that is not replaced. Boot is taxable up to the amount of your realized gain, which is why this calculator estimates a tax even when you complete an exchange. To fully defer, the replacement property generally must cost at least as much as the one you sold.
What qualifies as "like-kind" property?
For 1031 purposes, almost any real property held for investment or business use is like-kind to any other — you can exchange a rental house for an apartment building, raw land, or a commercial unit. Personal residences and vacation homes used personally do not qualify, and since 2018 only real estate (not equipment or other personal property) is eligible.
Do I need a qualified intermediary?
Yes. To defer tax you cannot take actual or constructive receipt of the sale proceeds — a qualified intermediary (QI) must hold the funds and handle the exchange documents. This tool is an estimate using flat rates, not tax advice; confirm your numbers and deadlines with a CPA and a qualified intermediary before relying on them.