Real Estate

1031 Exchange Tax Deferred Calculator

Calculate deferred capital gains taxes and depreciation recapture taxes when selling investment property and rolling proceeds into like-kind real estate.

What this calculator does

The 1031 Exchange Tax Deferred Calculator estimates your result instantly from the values you enter, using standard real estate formulas. Calculate deferred capital gains taxes and depreciation recapture taxes when selling investment property and rolling proceeds into like-kind real estate. Calculations run in your browser, so nothing you type is sent to a server, and the output is an estimate for planning rather than financial advice.

1031 Exchange Calculator (Tax-Deferred Gain) Results

$0.00

Total Capital Gain

  • Total Tax Deferred —
  • Adjusted Cost Basis —

What This Means

About 1031 Exchange Tax Deferred Calculator

The 1031 Exchange Calculator calculates the total federal capital gains tax (15-20%), state tax, and Section 1250 depreciation recapture tax (25%) legally deferred by executing an IRS Section 1031 Like-Kind Exchange.

Formula & Mathematical Calculation

Total Gain = Sale Price - Adjusted Cost Basis (Original Cost - Cumulative Depreciation)

Total Tax Deferred = ( Depreciation Recapture × 25% ) + ( Capital Gain × Federal Rate ) + State Tax + NIIT (3.8%)

Calculation Example

$600,000 Sale ($300k Original Cost Basis, $80k Depreciation Claimed): Total Gain = $380,000. Total Deferred Tax = $98,400 (100% of which is reinvested into the replacement property!).

Key Benefits

  • Calculates deferred federal capital gains tax and 25% depreciation recapture tax
  • Models 1031 replacement property acquisition requirements (equal or greater value)
  • Tracks strict IRS timeline milestones (45-day identification, 180-day closing)
  • Preserves 100% of real estate equity for compounding wealth
  • Essential commercial and residential investor tool

How to Use this Calculator

  1. Enter Sale Price & Original Purchase Cost
    Input relinquishing property sales price and original cost basis.
  2. Enter Total Cumulative Depreciation Claimed
    Input total depreciation deductions taken over holding period.
  3. Calculate Deferred Tax
    Click Calculate to view total deferred tax and reinvestment capital.

Assumptions & Limitations

What the calculation assumes

  • Every value you enter is treated as an exact, known amount.
  • Rates and contributions are assumed to stay constant for the whole period unless the form asks for them separately.
  • Results use standard financial formulas and ignore fees, penalties and promotional terms that are not entered above.
  • Inflation, tax changes and market volatility are not modelled unless a field for them is provided.
  • Amounts are unit-agnostic: results are returned in the same currency you enter.

What it does not cover

  • 1031 Exchange Tax Deferred Calculator produces estimates for education and planning, not a quote, offer or professional advice.
  • Real-world outcomes differ when fees, taxes, rounding rules or provider-specific terms apply.
  • Local regulations and tax rules vary by country and change over time; verify current rules for your jurisdiction.
  • Figures are only as accurate as the inputs you supply — check them before acting on the result.
  • For decisions with lasting financial impact, confirm the numbers with a qualified professional.

Frequently Asked Questions

You must formally identify potential replacement properties in writing within 45 days of closing the sale, and acquire the replacement property within 180 days.

It builds an adjusted basis by subtracting the depreciation claimed from the original cost basis, finds the total gain as sale price minus adjusted basis, and then isolates the capital-gain portion as total gain minus depreciation. Depreciation is also recaptured separately at the 25% rate built into the engine.

Four: depreciation recapture (depreciation times 0.25), federal tax (capital gain times your federal rate), state tax (capital gain times your state rate), and the net investment income tax computed as capital gain times the 3.8% rate built into the engine. The deferred total is the sum of all four.

With a $450,000 sale, $300,000 original basis, $50,000 depreciation, a 15% federal rate, and a 5% state rate: adjusted basis is $250,000, total gain is $200,000, capital gain is $150,000, recapture is $12,500, federal tax $22,500, state tax $7,500, NIIT $5,700 — a deferred total of $48,200.00.

The sale price must be greater than 0. If it is 0 or blank, the engine stops with 'Enter the sale price.' The two tax rates are inputs you provide, and the engine applies exactly the percentages you enter.

Free to use, no account needed. Calculations run in your browser, so nothing you type is sent to a server. Results are estimates — how we build and check our calculators.

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