1031 Exchange Calculator
Deferral is the whole point of a like-kind exchange. Boot is where part of it quietly becomes payable anyway.
What This Calculator Does
Sets an outright sale beside an exchange: it 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 turns taxable as boot when you take cash out or reduce your debt.
Who Is This For
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
Enter the 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 that must be met.
Frequently Asked Questions
What does a 1031 exchange actually do?
A provision permitting deferral of tax on the gain from an investment property when the proceeds roll into another one. Deferred is not erased — the liability follows your basis into the replacement property until you eventually sell without exchanging.
How do the 45-day and 180-day rules run?
From the closing of your sale you have 45 days to identify replacement property in writing and 180 days to close on it. The two clocks run concurrently, not consecutively, and they count calendar days. Miss either one and the exchange collapses.
Must I use a qualified intermediary?
Yes. Proceeds go to a qualified intermediary and never touch your hands or your account, because constructive receipt of the money disqualifies the exchange. The intermediary is engaged before closing, not after it.
What 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 is smaller than the debt retired, since that relief counts as value received. Either one 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, and a primary residence falls outside that — it has its own exclusion under separate rules. A rental or investment condo does qualify.
Where does the depreciation go?
Recapture is deferred alongside the capital gain and your basis carries over into the replacement property. That lower basis means smaller depreciation deductions from then on, which is part of the bargain. Work through it with your CPA before the sale closes rather than after.