1031 Exchange Calculator

Defer capital gains tax by reinvesting in like-kind property. See your tax savings, leverage boost, and critical deadlines.

A 1031 exchange defers — not eliminates — capital gains. Use it to upgrade your real estate portfolio without an immediate tax bill, preserving capital to compound into a larger property.

Relinquished Property (Sold)

Total depreciation over ownership period

Commission + closing costs

Tax & Exchange Info

0% for TX, FL, WA, NV, WY, SD, AK, NH, TN

Must be ≥ net sale price for full tax deferral

Critical 1031 Deadlines

45-Day Identification Deadline

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Must identify up to 3 replacement properties by this date

180-Day Exchange Deadline

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Must close on replacement property by this date

Without 1031 Exchange

Realized gain—
Depreciation recapture (25%)—
Federal cap gains tax—
State tax—
Total Tax Due —
Net to reinvest—

With 1031 Exchange

Net sale proceeds—
Tax deferred—
QI fees—
Net to reinvest —
Leverage boost—

Tax Deferred by Exchanging

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For educational purposes only. 1031 exchange rules are complex and strictly enforced. Always work with a qualified intermediary (QI) and tax advisor before initiating an exchange.

1031 Exchange: Complete Guide for Investors 2026

How a 1031 exchange works

When you sell an investment property, you normally owe capital gains tax on your profit. A 1031 exchange lets you defer that tax by rolling the proceeds directly into a "like-kind" replacement property — without touching the money. A qualified intermediary holds the funds between transactions.

The two critical deadlines

  • 45 days: You must identify up to 3 replacement properties within 45 calendar days of closing on your sale. These deadlines are strict — no extensions.
  • 180 days: You must close on the replacement property within 180 calendar days of your sale closing (or your tax filing deadline if earlier).

What qualifies as "like-kind"?

For real estate, "like-kind" is very broad — any US investment or business property can exchange into any other US investment or business property. A rental house can exchange into an apartment building, land, or commercial property. Primary residences and personal property do not qualify.

Frequently Asked Questions

What is a 1031 exchange?

An IRS provision allowing real estate investors to defer capital gains taxes by reinvesting sale proceeds into a like-kind property. You must use a qualified intermediary and meet 45-day/180-day deadlines.

How much can I save with a 1031 exchange?

You defer — not eliminate — taxes. On $200K in gains, you might defer $30K–$60K in federal taxes plus state taxes. The deferred tax compounds over time as you upgrade into larger properties.

What are the 1031 exchange timeline rules?

45 days to identify up to 3 replacement properties. 180 days to close the purchase. Both are from your relinquished property close date. No exceptions or extensions.

What is depreciation recapture?

The gain from accumulated depreciation deductions, taxed at 25% federally. In a 1031, recapture is also deferred and carried to the replacement property's basis.

Does a 1031 eliminate taxes permanently?

No — it defers them. When you sell the replacement property without exchanging, all deferred gains become taxable. However, heirs receive a stepped-up basis at death, potentially forgiving deferred gains.

What is a qualified intermediary?

A required third party (QI/exchange accommodator) who holds your proceeds between closings. You cannot touch the funds directly. QI fees run $750–$1,500.

Related Calculators

Capital Gains Calculator Rental Property Analyzer BRRRR Calculator Seller Net Proceeds