1031 Exchange Calculator
Planning a like-kind exchange? Enter your relinquished and replacement property details to see how much capital gains tax you can defer, whether you'll owe tax on boot, and your critical 45-day and 180-day deadlines.
Commissions, closing costs, etc.
Original cost + improvements - depreciation
Total depreciation claimed
Remaining balance on current property
Beyond exchange proceeds
Date of relinquished property sale
Frequently asked questions
What is a 1031 exchange?
A 1031 exchange (also called a like-kind exchange) allows real estate investors to defer capital gains taxes when selling an investment property by reinvesting the proceeds into a similar "like-kind" property. Under IRC Section 1031, the gain is deferred rather than eliminated — it reduces the basis of the replacement property.
What property qualifies for a 1031 exchange?
Since the Tax Cuts and Jobs Act (TCJA) of 2017, only real property held for investment or business use qualifies. This includes rental properties, commercial buildings, raw land, and certain land improvements. Personal residences, inventory (fix-and-flip), stocks, bonds, and personal property no longer qualify.
What are the 1031 exchange deadlines?
There are two critical deadlines measured from the date you close on the relinquished (sold) property: (1) The 45-Day Identification Period — you must identify potential replacement properties in writing within 45 calendar days. (2) The 180-Day Exchange Period — you must close on the replacement property within 180 calendar days (or your tax return due date, whichever is earlier). These deadlines cannot be extended.
What is "boot" in a 1031 exchange?
Boot is any value received in the exchange that is not like-kind real property. Common forms include cash proceeds not reinvested, net debt relief (when your old mortgage exceeds the new one), and personal property received. Boot triggers recognized (taxable) gain equal to the lesser of the boot received or the total realized gain.
How is depreciation recapture taxed in a 1031 exchange?
In a full deferral (no boot), depreciation recapture is deferred along with the capital gain. If gain is recognized due to boot, the recognized gain is first taxed as unrecaptured Section 1250 gain at 25% (up to the amount of accumulated depreciation), and any remaining recognized gain is taxed at your applicable long-term capital gains rate (0%, 15%, or 20%).
What is the new basis of the replacement property?
The basis of your replacement property equals its fair market value (purchase price) minus the deferred gain. This lower basis means you'll have a larger taxable gain when you eventually sell the replacement property without doing another 1031 exchange. The deferred gain effectively carries forward through the reduced basis.
Can I do a 1031 exchange on my primary residence?
No. Section 1031 only applies to property held for productive use in a trade or business, or for investment. Your primary residence does not qualify. However, if you convert a rental property to your primary residence (or vice versa), special rules under IRC Section 121 and 1031 may apply — consult a tax professional for these complex situations.
Is there a limit on how much gain I can defer?
There is currently no dollar limit on the amount of gain that can be deferred through a 1031 exchange. However, budget proposals in 2024 and 2025 suggested capping deferrals at $500,000 per taxpayer ($1 million for married filing jointly). As of April 2026, Congress has not enacted any such cap, and Section 1031 remains fully intact for real property.