About the 1031 Exchange Calculator
This 1031 exchange calculator estimates how much capital gain you can defer when you sell an investment property and buy a replacement under Section 1031 of the US tax code. Enter the sale price, selling costs, your adjusted basis and the mortgage paid off, then the price and new loan on the replacement property. The calculator works out the realized gain, any cash or mortgage boot that becomes taxable, the gain you defer, and the carryover basis of the new property.
It is meant for landlords and investors planning a like-kind exchange who want to know, before talking to a qualified intermediary or CPA, whether a replacement property is big enough to defer the whole gain. The results also show the minimum replacement price and equity you need to reinvest, and the 45-day identification and 180-day closing deadlines from your sale date.
This is a simplified planning model. It uses a single blended tax rate for the recognized gain and does not separately compute depreciation recapture, state conformity, related-party rules or the earlier tax-return deadline that can shorten the 180-day period. Rules reflect current federal law for the 2026 tax year: since 2018, only real property held for investment or business use qualifies.
With the default inputs, the deferred gain is $350,000.00. Change any value above to recalculate instantly.
How to use the 1031 exchange calculator
- 1Enter the sale price and the selling and exchange costs of the property you are giving up.
- 2Enter its adjusted basis and the mortgage paid off at closing.
- 3Enter the replacement property’s price and the new loan you will take on it.
- 4Set an estimated tax rate and the sale closing date.
- 5Check the boot figures, deferred gain and deadlines, then confirm with your intermediary or CPA.
Formula and method
The amount realized is the sale price minus selling and exchange costs; subtracting the adjusted basis gives the realized gain. Cash boot is equity from the sale that is not reinvested (net proceeds minus the equity put into the replacement). Mortgage boot is net debt relief: debt paid off minus new debt, which can be offset by extra cash you add, but taking on more debt never offsets cash you receive.
Gain is recognized up to the total boot, and the rest is deferred. The replacement property’s basis is its price minus the deferred gain, so the deferred gain is taxed later if you sell without another exchange. Deadlines are 45 calendar days to identify replacement property and 180 days to close, counted from the sale date.
- AR
- Amount realized = sale price − selling costs
- AB
- Adjusted basis of the relinquished property
- Boot
- Cash or net debt relief received — taxable up to the gain
- Basis₂
- Replacement price − deferred gain
Worked examples
Trading up from $800k to $900k
Net proceeds are $752,000, so the gain over a $400,000 basis is $352,000. After paying off the $300,000 loan, $452,000 of equity is available but only $450,000 goes into the new property, leaving $2,000 of cash boot. That $2,000 is taxable and $350,000 is deferred; the new property’s basis is $900,000 − $350,000 = $550,000.
Trading down creates boot
Only $400,000 of the $452,000 equity is reinvested ($52,000 cash boot), and the new $250,000 loan is $50,000 smaller than the $300,000 paid off (mortgage boot). Total boot of $102,000 is taxed now — about $25,500 at 25% — and $250,000 is deferred.
Adding cash to offset lower debt
The new loan is $100,000 smaller than the old one, but you put $650,000 of equity in — $198,000 more than the sale produced. Added cash offsets debt relief, so there is no boot and the whole $352,000 gain is deferred. The new basis is $850,000 − $352,000 = $498,000.
Frequently asked questions
What is boot in a 1031 exchange?+
Boot is anything you receive in an exchange that is not like-kind real property — typically cash left over from the sale or a reduction in mortgage debt. Boot is taxable up to the amount of your realized gain, while the rest of the gain stays deferred.
What are the 45-day and 180-day rules?+
You must identify potential replacement properties in writing within 45 calendar days of selling, and complete the purchase within 180 days of the sale or by the due date (with extensions) of your tax return for that year, whichever comes first. Weekends and holidays are not excluded.
How do I avoid paying any tax in a 1031 exchange?+
Buy replacement property worth at least the net sale price, reinvest all of the net equity through a qualified intermediary, and replace any mortgage paid off with new debt or additional cash. Touching the sale proceeds yourself can disqualify the exchange.
Does a 1031 exchange eliminate the tax?+
No, it defers it. The deferred gain reduces the basis of the replacement property, so it is taxed when you eventually sell in a taxable sale. Heirs who inherit the property generally receive a stepped-up basis under current law, which can wipe out the deferred gain.
What property qualifies for a 1031 exchange?+
Since the Tax Cuts and Jobs Act took effect in 2018, only real property held for investment or for use in a trade or business qualifies. Your main home, property held mainly for resale such as flips, and personal property like equipment do not qualify.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.