Like Kind Exchange Calculator
A 1031 exchange lets you defer capital gains tax by reinvesting in like-kind property. See your realized, recognized (taxable) and deferred gain.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Relinquished property value
- $500,000
- Your adjusted basis in it
- $300,000
- Replacement property value
- $520,000
- Cash or non-like property received (boot)
- $0
- Capital gains tax rate
- 20%
deferring about $40,000 of tax
- Realized gain$200,000
- Recognized (taxable now)$0
- Deferred gain$200,000
How the gain you defer changes with relinquished property value
Holding the other inputs at the example above, here is how the result moves as relinquished property value changes.
| Relinquished property value | Gain you defer | Realized gain |
|---|---|---|
| $300,000 | $0 | $0 |
| $500,000 | $200,000 | $200,000 |
| $800,000 | $500,000 | $500,000 |
| $1,500,000 | $1,200,000 | $1,200,000 |
The math behind it
A 1031 exchange lets you defer capital gains tax by rolling real property into like-kind replacement property. The calculator finds your realized gain as sale price minus adjusted basis. Any boot — cash or non-like-kind property you receive — is taxable now, so the recognized (currently taxable) gain is the smaller of your realized gain and the boot. The rest is the deferred gain. It applies your capital gains rate to show tax due now versus tax deferred, and sets your new property's basis at replacement price minus the deferred gain.
Assumptions & limits
- The gain deferred is not erased — it carries forward as a lower basis in the replacement property and is taxed on a later sale unless exchanged again.
- Only boot received triggers current tax here; the model does not separately compute depreciation recapture, which can be taxed at a different rate.
- Since 2018, 1031 treatment applies only to real property held for business or investment, not to personal property or a primary residence.
- The calculator does not enforce the strict deadlines — 45 days to identify and 180 days to close a replacement.
- A single flat capital gains rate is applied; actual rates depend on income, holding period, and state tax.
Common questions
What is 'boot' and why is it taxable?
Boot is anything you receive in the exchange that is not like-kind property — most often cash, but also debt relief or other assets. Because a 1031 exchange only defers gain to the extent you stay fully invested in like-kind property, any boot you pocket is treated as gain recognized now and taxed. The calculator sets the taxable amount to the lesser of your total gain and the boot received.
Does a 1031 exchange eliminate the tax or just delay it?
It delays it. The deferred gain is folded into a lower basis on your replacement property, so it resurfaces when you eventually sell without exchanging again. Investors who keep exchanging can defer indefinitely, and a step-up in basis at death can wipe the deferred gain out — but on its own, a 1031 postpones rather than cancels the tax.
What are the 45-day and 180-day rules?
They are the deadlines that make an exchange valid. You have 45 days from selling the relinquished property to formally identify potential replacement properties, and 180 days total to close on one. Miss either window and the exchange fails, making the whole gain taxable. This calculator does the tax math but does not track those dates for you.