1031 Exchange CalculatorLike-kind exchange tax savings, boot, 45/180-day deadlines and your new basis, using 2026 IRS tax brackets
See how much capital gains tax, depreciation recapture, net investment income tax and state tax a 1031 exchange defers when you swap one investment property for another. Find out whether any cash or mortgage boot will be taxed, when your identification and closing deadlines fall, and what the deferred tax is worth over time.
By Manzoor Ahmad · 13+ years of web development & SEO experienceUpdated October 21, 2026 · 2026 federal tax brackets
Property you’re selling
—Your tax situation
2026 rulesReplacement property
—Full-deferral checklist
—
Fully deferredYour 45- and 180-day deadlines
Both clocks start the day your sale closes and run at the same time. Weekends and holidays count, and there are no extensions except for federally declared disasters.
Sell and pay tax vs. 1031 exchange
Federal tax is stacked on your other income using the 2026 brackets, with recaptured depreciation taxed at up to 25%.
What the deferred tax is worth over time
Projected equity if you sell, pay the tax and buy with what’s left, versus exchanging the full equity.
How a 1031 exchange calculator works
A 1031 exchange lets you sell investment or business real estate and buy “like-kind” property without paying tax on the gain now. The calculator figures four things:
Realized gain = (Sale price − selling costs) − (Purchase price + improvements − depreciation)
Boot = equity not reinvested + debt not replaced (net of extra cash added)
Taxable now = the smaller of realized gain or boot
New basis = replacement cost − deferred gain
Reinvest all your equity in property of equal or greater value, with equal or greater debt (or extra cash in its place), and no tax is due until you sell without exchanging again.
Worked example (the default inputs)
1031 exchange rules you must follow
Section 1031 survived the 2025 tax law changes intact for real property, so the rules below apply to exchanges in 2026. Since 2018, only real estate qualifies; equipment, vehicles and other personal property don’t.
Identify replacement properties in writing, signed, to your qualified intermediary within 45 days of the sale.
Close on the replacement within 180 days of the sale or by your tax return due date, including extensions, whichever is earlier.
A qualified intermediary must hold the sale proceeds. If you receive them, even briefly, the exchange fails.
Identify up to three properties of any value. Most investors use this rule.
Or identify any number of properties whose total value is no more than twice the value of the property you sold.
Or identify more than that, but then you must buy at least 95% of the total value you identified.
| Requirement | What qualifies | What doesn’t |
|---|---|---|
| Property use | Rentals, commercial, land and business property held for investment or business use | Your main home, flips and inventory held for resale |
| Like-kind | Any US real estate for any other US real estate (land for an apartment, a duplex for a shopping center) | US property for foreign property |
| Same taxpayer | The same person or entity sells and buys (a single-member LLC counts as you) | Partnership sells, partners buy separately, unless restructured in advance |
| Related parties | Allowed if both sides hold their property for two years | Buying from a relative who then sells within two years |
What is boot in a 1031 exchange?
Boot is anything you receive that isn’t like-kind real estate. It doesn’t cancel the exchange, but it’s taxable up to the amount of your gain, and it’s generally taxed first as depreciation recapture.
Cash boot
Sell for a net $500,000 with no mortgage, buy for $450,000, and the $50,000 you keep is taxable.
Fix: buy more expensive property, or accept that the leftover cash is taxed.
Mortgage boot
Pay off a $300,000 loan and take only a $200,000 loan on the new property: $100,000 of debt relief is boot.
Fix: add $100,000 of your own cash or borrow more.
No boot
Buy property worth at least your net sale price, reinvest all the equity, and replace the debt with new debt or fresh cash.
Result: the entire gain is deferred.
Use the Trade down and Pay off debt buttons in the calculator to see how much boot each creates and the tax on it.
Deferred, not forgiven: basis, recapture and step-up
A 1031 exchange postpones tax; it doesn’t erase it. Your deferred gain carries into the new property as a lower basis, which means smaller depreciation deductions on the replacement and a bigger gain when you eventually sell. The depreciation recapture you deferred, taxed at up to 25%, is still waiting too; see how it works with the depreciation recapture calculator.
Many investors keep exchanging (“swap till you drop”). Under current law, heirs who inherit the property receive a stepped-up basis to market value at death, which can wipe out the deferred gain entirely. Compare what you’d owe on an ordinary sale with the real estate capital gains tax calculator.
| Tax deferred by a 1031 | 2026 federal rate | Notes |
|---|---|---|
| Long-term capital gain | 0%, 15% or 20% | 20% above $613,700 taxable income (joint) or $545,500 (single) |
| Unrecaptured §1250 gain | Up to 25% | The depreciation you’ve claimed, taxed at your ordinary rate, capped at 25% |
| Net investment income tax | 3.8% | On gain above $250,000 MAGI (joint) or $200,000 (single) |
| State income tax | 0%–13.3% | Most states follow federal deferral; some track gains you move out of state |
California, Oregon, Massachusetts and Montana have “clawback” rules: if you exchange in-state property for property in another state, they can still tax the deferred gain when you eventually sell. California requires an annual information return (Form FTB 3840) until then.
1031 exchange vs. other ways to handle the gain
| Strategy | Tax effect | Best for |
|---|---|---|
| Standard 1031 (delayed) | Defers all gain and recapture if fully reinvested | Investors who want to keep owning and managing property |
| Delaware Statutory Trust (DST) | Qualifies as like-kind; full deferral | Passive owners or a backup identification; $8.41B was raised in 2025 |
| Reverse exchange | Same deferral; buy first, sell within 180 days | When the right replacement appears before your sale |
| Improvement (build-to-suit) | Exchange funds pay for improvements before you take title | Trading up into a property that needs work |
| 721 UPREIT | Contribute to a REIT partnership; further deferral | Exiting active ownership; often follows a DST |
| Installment sale | Spreads the gain over the years you’re paid | Sellers willing to finance the buyer |
| Sell and pay tax | All tax due for the year of sale | Leaving real estate, or a small gain in a low bracket |
Before you commit to a replacement, check that it pays for itself: compare its cap rate with the cap rate calculator, its income with the NOI calculator, and whether the rent covers a new loan with the DSCR calculator.
Six mistakes that blow up a 1031 exchange
- Touching the moneyArrange your qualified intermediary before the sale closes. Proceeds paid to you can’t be exchanged.
- Missing day 45Line up replacement options before you list. The deadline doesn’t move for weekends or holidays.
- Forgetting the debtPaying down your mortgage without adding cash creates mortgage boot, which is taxable.
- Exchanging a flipProperty bought to resell is inventory, not investment property, and doesn’t qualify. Analyze flips with the house flip calculator.
- Changing who owns itThe taxpayer on the sale must be the taxpayer on the purchase. Restructure partnerships well in advance.
- Ignoring the tax-return deadlineA sale late in the year can lose part of its 180 days unless you file an extension.
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1031 exchange questions
How do you calculate a 1031 exchange?
Subtract your adjusted basis (purchase price plus improvements minus depreciation) from the net sale price to get your realized gain. Then compare the equity and debt on both properties: any equity you don’t reinvest, or debt you don’t replace, is boot. You’re taxed now on the smaller of the boot or the gain; the rest is deferred.
How much tax does a 1031 exchange save?
All of the federal capital gains tax, depreciation recapture, 3.8% net investment income tax and usually state tax on the gain, if you reinvest everything. On the default example, that’s the full amount shown in the calculator.
What are the 45-day and 180-day rules?
You have 45 calendar days after your sale closes to identify replacement property in writing, and 180 days (or until your tax return is due, if earlier) to close on it. The two periods run at the same time.
Do I have to buy a more expensive property?
To defer all the tax, buy property worth at least your net sale price and reinvest all your equity. You can buy cheaper property, but the difference is generally taxable boot.
What is mortgage boot?
Debt relief: if your new loan is smaller than the one you paid off and you don’t add cash to make up the difference, the reduction is treated like cash you received and is taxable.
Can I do a 1031 exchange on my primary residence?
No. A 1031 applies only to property held for investment or business use. Your home may qualify for the $250,000/$500,000 Section 121 exclusion instead.
Is depreciation recapture deferred in a 1031 exchange?
Yes, in a full exchange of depreciable real estate. It carries over with the deferred gain and becomes taxable when you sell without exchanging, unless the property passes to heirs with a stepped-up basis.
What is my basis in the replacement property?
Generally, the replacement’s cost minus the gain you deferred. A lower basis means smaller depreciation deductions and a larger taxable gain when you eventually sell.
Can I take some cash out in a 1031 exchange?
Yes. That’s a partial exchange: the cash is taxable boot, up to your gain, and the rest of the gain stays deferred.
Do I need a qualified intermediary?
For a standard delayed exchange, yes. The intermediary holds your sale proceeds and buys the replacement on your behalf, so you never have access to the money.
Which IRS form reports a 1031 exchange?
Form 8824, Like-Kind Exchanges, filed with your tax return for the year you sold the relinquished property. It calculates the realized and recognized gain and the replacement’s basis.
Is this 1031 exchange calculator free and private?
Yes. It’s free, needs no sign-up and runs entirely in your browser; nothing you enter is sent to or stored by DexoCalc.
Manzoor Ahmad
13+ years of web development & SEO experience · Founder, DexoCalc
Manzoor builds and maintains every DexoCalc calculator, including the property and tax libraries. This calculator follows the Form 8824 logic for realized gain, boot and basis, nets mortgage relief against new debt and added cash, and taxes recognized gain with the same 2026 bracket engine as our capital gains calculator.
Sources
- IRS — Like-kind exchanges: real estate tax tips
- IRS — About Form 8824, Like-Kind Exchanges
- 2026 capital gains brackets and NIIT thresholds (Rev. Proc. 2025-32)
- HunterMaclean — 1031 tax implications: boot and recapture (April 2026)
- Lee & Associates — 2025 tax law preserves 1031 exchanges
- DST fundraising data, 2025–2026 (Mountain Dell Consulting via AltsWire)
This calculator gives a planning estimate, not tax or legal advice. It assumes residential straight-line depreciation and the standard deduction, and doesn’t model AMT, passive loss carryovers, state clawbacks or every boot-netting rule. Work with a qualified intermediary and a CPA before you sell.