1031 Exchange Calculator
Estimate the deferred gain, taxable boot and new cost basis in a like-kind 1031 exchange of investment property.
How it works
Realized gain = sale price − selling costs − adjusted basis · Boot = max(0, net proceeds − replacement price) · Taxable = min(gain, boot) · New basis = replacement price − deferred gain
Section 1031 lets an investor defer tax on the gain from selling investment real estate by rolling the proceeds into a like-kind replacement. To defer the entire gain you must reinvest all the net proceeds and buy equal or greater value; any cash or debt relief you keep is "boot" and is taxed now. The deferred gain does not vanish — it lowers the new property’s basis, so tax is postponed until a future sale, not erased.
Worked example
Sell for $500,000 with $30,000 of costs (net $470,000) on a $300,000 basis: realized gain is $170,000. Buy a $550,000 replacement — above the $470,000 net — so there is no boot, the full $170,000 gain defers, and the new basis is 550,000 − 170,000 = $380,000.
Frequently asked questions
What is "boot" in a 1031 exchange?
Boot is any value you receive that is not like-kind property — leftover cash if you buy down in price, or a reduction in mortgage debt. Boot is taxable in the year of the exchange up to the amount of your realized gain.
Do I avoid the tax forever?
No — you defer it. The deferred gain reduces the replacement property’s basis, so a later taxable sale recaptures it. Some investors chain exchanges for years; a step-up in basis at death can ultimately eliminate it, but that is estate planning, not the exchange itself.
What are the 45- and 180-day rules?
You must identify replacement property within 45 days of selling and close on it within 180 days. Missing either deadline disqualifies the exchange and makes the whole gain taxable. A qualified intermediary must hold the proceeds in between.
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Educational estimate, not financial, tax or lending advice. Confirm figures with your lender, agent or a qualified professional.