1031 Exchange Calculator
Realized gain, taxable boot, deferred gain, and your new basis in the replacement property.
A 1031 exchange calculatorestimates how much capital gains tax you can defer by rolling proceeds from an investment property sale into a replacement property under IRC §1031. It computes your realized gain, flags any taxable "boot" (cash or debt relief not offset by reinvestment), and shows the resulting deferred gain plus your carryover cost basis in the new property.
How Deferred Gain Is Calculated
The exchange defers tax on your realized gain except to the extent you receive "boot" — cash pulled out of the deal or a net reduction in mortgage debt. Boot is taxed immediately; everything else carries forward into the new property's basis.
Realized Gain
Sale Price − Selling Costs − Adjusted Basis
Recognized (Taxable) Gain
MIN(Realized Gain, Total Boot)
| Component | Treatment |
|---|---|
| Cash boot | Net sale equity not reinvested into the replacement property |
| Debt-relief boot | Old mortgage payoff exceeding the new loan amount, unaddressed with extra cash |
| Depreciation recapture | Taxed at 25% up to the recognized gain; the rest carries over deferred |
| Remaining gain | Taxed at your LTCG rate + state rate + NIIT if it's recognized |
Example: selling a $550,000 property with a $150,000 mortgage payoff and buying a $600,000 replacement with a $180,000 loan reinvests all net equity and increases debt — a fully deferred exchange with $0 in boot.
⚠️ Expert Pro-Tip
Buy up in both price and debt. To defer 100% of your gain, the replacement property generally needs to cost at least as much as your net sale price, and carry mortgage debt at least equal to what you paid off — unless you contribute extra cash to make up the difference. Buying "down" in either price or leverage almost always creates boot, even if you reinvest every dollar of proceeds.
1031 Exchange Calculator
Relinquished Property
Replacement Property
Tax Assumptions
Your Results
Estimate only — actual §1031 treatment depends on a Qualified Intermediary, exchange timing (45/180-day rules), and how your CPA characterizes debt relief. Confirm with both before closing.
Based on your results — what to do next:
Check if the replacement property cash flows
Your replacement property loan of $180,000 needs to cash flow — run the DSCR before you commit inside your 45-day identification window.
See the new payment on the replacement loan
A $180,000 loan on the $600,000 replacement property — check the monthly payment at today's rates.
Valuing the property as part of a larger portfolio or business
With $328,500 in new basis, see how this exchange fits into your overall real estate business valuation.