1031 Exchange Improvement (Build-to-Suit) 2027 Calculator
Calculate construction budget needed for an improvement 1031 exchange. Determines how much of the construction must be completed by Day 180 to defer 100% of gains.
| Realized Gain | — |
| Replacement Property Value at Day 180 (Purchase + Completed Improvements) | — |
| Total Reinvested (Replacement + Completed Improvements) | — |
| Cash Boot (Sale - Replacement Purchase - Day-180 Improvements) | — |
| Mortgage Boot (Old Debt - New Debt) | — |
| Net Taxable Boot | — |
| Estimated Tax Liability | — |
| Gain Successfully Deferred | — |
Improvement (build-to-suit) 1031 exchange under IRC §1031 allows you to use unspent exchange proceeds to pay for construction on the replacement property — but only what is completed and titled within 180 days counts toward your reinvestment. 2027 IRS guidance unchanged: parked title with Exchange Accommodation Titleholder (EAT), 180-day construction window. Source: IRS Rev. Proc. 2000-37, IRC §1031.
How Improvement 1031 Exchanges Work in 2027
Improvement (build-to-suit) 1031 lets you use leftover exchange proceeds to pay for construction on the replacement property. An Exchange Accommodation Titleholder (EAT) parks title and pays contractors directly. Only construction completed and capitalized to the property by Day 180 of the exchange counts. Any unspent cash returned to you is taxable boot.
180-Day Construction Window Strategy
Day 0 is the closing of the relinquished property sale. Day 45 is the deadline to identify replacement properties in writing. Day 180 is the absolute deadline for both: title transfer to taxpayer AND construction completion. To maximize deferral, pre-arrange contractor schedules, escrow construction draws, and pre-pull permits. Partial completions count only if titled to the EAT then transferred.
Common Improvement Exchange Mistakes
(1) Underestimating construction timeline — 180 days passes fast with permits and weather. (2) Adding land value at the wrong stage — must own land via EAT before construction begins. (3) Forgetting to capitalize soft costs (architects, permits, financing fees) — they count toward reinvestment. (4) Taking constructive receipt of unspent funds at Day 180. (5) Failing to identify the improved property properly on the 45-day identification form.
Last updated May 2026. Sources: IRS Rev. Proc. 2000-37, IRS §1031 Like-Kind Exchanges.