A 1031 exchange lets you sell a commercial property and roll the entire gain into the next one without paying tax on it now, and this free calculator shows you what is at stake. Enter your sale numbers and you will see the gain and the tax you can defer.
The tax you defer is money that stays invested and keeps compounding for you instead of going to the IRS. That is why the 1031 is one of the most powerful tools in real estate. Here is the tool, then the rules you cannot break.
A 1031, in one line: it lets you defer capital gains tax by reinvesting the proceeds from selling an investment property into another like-kind investment property.
To fully defer: you generally must reinvest all of your net proceeds and buy a property of equal or greater value, replacing your debt as well. Anything you keep (called boot) is taxable.
How to Use the 1031 Calculator
The calculator estimates your capital gain, the tax you would owe on a straight sale, and therefore the tax you can defer by exchanging. That deferred tax is the capital you get to keep working in the next deal instead of sending it to the government.
To fully defer, the rules are strict: reinvest all your net proceeds, buy equal or greater value, and replace your debt. Keep any cash or reduce your debt and that piece, the boot, becomes taxable. The clock is strict too, which is the part that trips people up, so watch the deadlines in the video below.
Watch: How To Do A 1031 Exchange [What EVERY Investor Should Know]
The 1031 Deadlines You Cannot Miss
Two deadlines make or break an exchange. From the day you close your sale, you have 45 days to identify your replacement properties in writing, and 180 days to close on one of them. These run at the same time, not back to back, and they do not stop for weekends or holidays. Miss either one and the exchange fails and the tax comes due. Line up a qualified intermediary before you sell, because you cannot touch the proceeds yourself. For the full picture, read my guide to how a 1031 exchange works.
1031 Exchange Calculator FAQ
How much tax can a 1031 exchange defer?
You can defer the federal and state capital gains tax and the depreciation recapture tax on the entire gain, as long as you follow the rules and reinvest fully into a like-kind property.
What are the 1031 exchange deadlines?
You have 45 days from the sale to identify replacement properties in writing and 180 days to close. Both clocks start at your sale closing and run at the same time.
What is boot in a 1031 exchange?
Boot is any value you do not reinvest, such as cash you keep or a reduction in your debt. Boot is taxable even inside an otherwise valid exchange.
Do I need a qualified intermediary?
Yes. You cannot take possession of the sale proceeds yourself. A qualified intermediary holds the funds and handles the exchange, and you should have one lined up before you close the sale.
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Explore CRE CentralFor the full rules and strategy, read my complete 1031 exchange guide, or see all the commercial calculators.