Calculator
Your Property
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Your Results
Enter your property details to see how much you'd save with a 1031 exchange.
How the 1031 exchange calculator works
The calculator estimates three numbers: capital gains tax you'd owe without a 1031 exchange, depreciation recapture tax, and total tax deferred. Here's the math behind each line.
1. Gross capital gain
Sale price minus adjusted basis. Adjusted basis = original purchase + capital improvements − depreciation already taken. This is the taxable increase in value.
2. Depreciation recapture (“section 1250 gain”)
The IRS taxes the depreciation you took at a flat 25%, not the regular capital gains rate. This is often the single biggest surprise for investors — even if the property barely appreciated, you can owe tens of thousands in recapture.
3. Long-term capital gains tax
The remainder of the gain (after recapture) is taxed at your long-term rate: 0%, 15%, or 20% federal depending on income. Plus state tax. Plus the 3.8% Net Investment Income Tax if your modified AGI is above $200k single / $250k married.
Net Investment Income Tax (3.8%), state-specific clawback rules (California), cost segregation, partial exchanges, and “boot” tax. These are all covered in the emailed report.
Should I do a 1031 exchange?
Three things usually indicate yes:
- Your tax savings exceed the deal friction. Most 1031s cost $750–$3,000 in QI fees. If the calculator above shows $30k+ in taxes, the math is obvious.
- You plan to keep investing in real estate. 1031 defers tax, it doesn't eliminate it. If you want to exit real estate entirely, paying the tax and moving on is often simpler.
- You have a clear replacement property plan. The 45-day identification window is strict. Going into an exchange without knowing what you're buying is a common way to blow the deadline.
What most calculators get wrong
Two things: depreciation recapture and boot. Most online 1031 calculators only show “tax saved” based on the capital gains rate alone, ignoring the 25% recapture rate — which for a fully-depreciated rental held 20+ years can be the majority of your tax bill. This calculator shows both lines separately so you see the full picture.
Boot — any cash or debt reduction you walk away with in a 1031 — is also often missed. If you sell for $1.5M and only buy a $1.2M replacement, the $300k difference is taxable boot even inside the exchange. The emailed report walks through a boot scenario for your numbers.
Frequently asked questions
How accurate is this calculator?
The calculator uses current federal capital gains rates and a flat 25% depreciation recapture rate. Directional accuracy is high — the number you see should be within 5–10% of your true tax bill. For exact figures you'll want a CPA or my emailed report with your state factored in.
Do I have to give my email to see results?
The headline numbers appear instantly without any email. Email is only required for the detailed CPA-ready breakdown with state-specific tax, NIIT, and boot scenarios.
What counts as “capital improvements”?
Anything that extends the life of the property or adds value: new roof, HVAC replacement, renovations, additions, new plumbing or electrical. Not repairs (patching a roof), not cosmetics (painting), not landscaping that doesn't add structural value.
Does this calculator include state taxes?
The quick estimator above takes your state rate as an input — enter your best guess or leave 0. The emailed report includes a lookup for all 50 states plus California clawback exposure if you're exchanging out of state.
What's “boot” and is it in this calculator?
Boot is any cash, debt reduction, or non-like-kind property you receive in a 1031 — it's taxable even though the exchange itself defers the main gain. This calculator assumes a full exchange (no boot). The emailed report includes a boot scenario walkthrough.
Can I do a 1031 exchange myself?
No. The IRS requires a qualified intermediary to hold the funds between sales. If you touch the money even briefly, the exchange is void. I'm a Certified Exchange Specialist and have facilitated 5,000+ exchanges nationwide.
Ready to talk through your numbers?
30-minute consultation. I'll walk through your specific situation, identify red flags, and tell you honestly whether a 1031 makes sense for you.
Schedule Free Consultation