1031 Tax-Deferred Gain Calculator
1031 exchange: defer ALL capital gain + depreciation recapture. Sale → identify in 45 days → close in 180 days. NO partial taxation if no boot.
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| New property | — |
| Cash boot | — |
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| Recognized this year | — |
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| Carried basis to new | — |
Section 1031 like-kind exchanges defer recognition of ALL capital gain (and depreciation recapture) when investment property is exchanged for similar investment property. No partial taxation if no boot received. Tax-deferred until eventual sale of replacement property (or step-up basis at death = eliminated).
How Exchange Works
Sell old property → escrow proceeds with Qualified Intermediary → identify replacement in 45 days → close replacement in 180 days. NO cash to seller in interim. Tax deferred 100% if all proceeds reinvested AND replacement value ≥ sold value AND new debt ≥ old debt.
Boot Triggers Recognition
Cash boot: receive cash = taxable. Mortgage boot: new mortgage smaller than old = taxable difference. Carryover boot: keep depreciable property. Each $1 of boot = $1 of recognized gain (until full gain recognized).
Strategic Combinations
Multi-property exchanges (drop and swap). Tenant-in-common (TIC) structures. Build-to-suit exchanges. Reverse exchanges (acquire first, sell second). Section 1031 + Opportunity Zone (further defer). Step-up basis at death = ZERO tax on accumulated gain.
Last updated May 2026. Sources: IRS Section 1031.