1031 Exchange Calculator

Calculate tax deferred in a 1031 exchange. See boot, depreciation recapture, and minimum replacement price.

By Konstantin Iakovlev · Updated September 2026 · Source: IRS — Instructions for Form 8824, Like-Kind Exchanges

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Capital Gain

$200,000.00

Tax Deferred

$42,500.00

Boot

$0.00

1031 Exchange Analysis

Sale Price$500,000.00
Adjusted Basis$300,000.00
Capital Gain$200,000.00
Capital Gains Tax (20%)$30,000.00
Depreciation Recapture (up to 25%)$12,500.00
Total Tax Without 1031$42,500.00
Replacement Property Price$550,000.00
Boot (Cash Not Reinvested)$0.00
Tax Deferred via 1031 Exchange$42,500.00

Full tax deferral achieved. Your replacement property price meets or exceeds the sale price, so no boot is recognized.

A 1031 exchange defers capital gains tax on investment property by reinvesting proceeds into like-kind property. You must identify the replacement within 45 days and receive it within 180 days, or by your tax return due date (with extensions) if that is earlier. A qualified intermediary normally holds the proceeds so you never receive them. Boot is taxed only up to your gain; state tax and the 3.8% net investment income tax are not included.

Use the 1031 Exchange Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Investors trading one investment property for a like-kind replacement use this tool to estimate how much tax they can defer in the process. Putting numbers to that deferral clarifies the real financial picture of a swap and shows how postponing capital gains taxes can stretch the money working in your portfolio.

To size the deferred gain, the calculator takes the relinquished property's selling price and subtracts its adjusted basis, then layers in any depreciation recapture. The replacement property's purchase price enters the picture too, along with any cash you walk away with, known as boot, which can be taxed even inside an otherwise qualifying exchange.

Loop in a qualified tax advisor or accommodator before you start a 1031 exchange, since the rules trace directly to IRS regulations and the penalties for missteps are real. Two deadlines trip up the most people: you have just 45 days after the sale to identify replacement properties and must receive one within 180 days, or by your tax return's due date (including extensions) if that comes sooner, and blowing either one can collapse the entire tax benefit.

Example: Deferring Capital Gains on an Investment Property

  1. 1 You sold an investment property for $1,000,000. Your adjusted basis (original purchase price + improvements - depreciation) was $400,000. You are looking to purchase a replacement property for $1,200,000.
  2. 2 The calculator would determine your capital gain as $600,000 ($1,000,000 - $400,000). Since you are reinvesting all proceeds into a like-kind property of equal or greater value, the entire $600,000 in capital gains would be deferred.
  3. 3 Result: $600,000 in capital gains deferred. No immediate capital gains tax liability.
  4. 4 Takeaway: By utilizing a 1031 exchange, you avoid paying capital gains tax on the $600,000 profit from your relinquished property, allowing you to reinvest the full amount into your new property and continue to grow your real estate portfolio tax-efficiently.

Source: IRS — Instructions for Form 8824, Like-Kind Exchanges · Last updated: September 2026

Frequently Asked Questions

What is a 1031 exchange?
A 1031 exchange lets you defer capital gains taxes when selling an investment property by reinvesting the proceeds into a like-kind replacement property within strict IRS deadlines. You must identify replacement properties within 45 days and receive one within 180 days, or by your tax return's due date (including extensions) if that is earlier.
How much tax does a 1031 exchange save?
A 1031 exchange defers federal capital gains tax (0%, 15% or 20%), the tax on depreciation you've claimed (unrecaptured section 1250 gain, taxed at up to 25%), the 3.8% net investment income tax if your income is above its threshold, and state taxes. On a $200,000 long-term gain, federal tax at the top 20% rate plus the 3.8% NIIT is $47,600 before any state tax; at 15% with no NIIT it is $30,000. At its defaults (a $200,000 gain that includes $50,000 of depreciation, taxed at 20% and 25%), the calculator shows $42,500 deferred, leaving out the NIIT and state tax.
Can I do a 1031 exchange on my primary residence?
No, 1031 exchanges only apply to property held for investment or business use. Your primary residence does not qualify. However, you may qualify for the Section 121 exclusion ($250K/$500K) on your primary home.

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