1031 Exchange Calculator

Gain, boot, and deferral model

Adjusted basis equals original cost plus capital improvements minus accumulated depreciation. Amount realized equals sale price minus entered selling costs, and realized gain is amount realized minus adjusted basis. The calculator compares relinquished debt and net cash with the replacement price, replacement debt, cash reinvested, and entered exchange expenses to estimate boot. Recognized gain is limited to the lesser of realized gain or modeled boot; deferred gain is the remainder. Tax outputs apply the rates you enter and are planning estimates, not a tax return calculation.

Replacement-property shortfall example

A $625,000 sale with $37,500 of selling costs has an amount realized of $587,500. If adjusted basis is $281,000, modeled realized gain is $306,500. A $720,000 replacement financed with $430,000 reinvests $290,000 of cash, less than the $377,500 of net sale equity after the old mortgage. In this simplified case, the calculator identifies $87,500 of potential cash boot and about $219,000 of deferred gain.

1031 exchange details to confirm early

• Engage a qualified intermediary before the relinquished closing; taking receipt or control of proceeds can disqualify the exchange.
• Track debt relief, cash retained, non-exchange expenses, basis, depreciation, and replacement costs separately. Seemingly small closing-statement items can change recognized gain.
• Identification and completion deadlines are strict, and state treatment can differ. Review the actual transaction with a qualified tax professional and intermediary.