Base scenario
Use your current numbers to establish a realistic 1031 exchange baseline.
This gives you a reference point for every change you test next.
1031 Exchange Calculator
Calculate tax savings from a 1031 exchange and determine if you qualify to defer capital gains taxes.
Financial Calculator
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How to use this calculator: Enter your financial information in the fields above. Results update automatically as you type. All calculations are performed locally in your browser - we never store or share your personal financial data.
⚠️
⚠️ For Planning Purposes Only
These calculations are estimates for educational and planning purposes. Always consult with qualified financial professionals before making financial decisions.
How the Math Works
- The calculator converts your inputs into monthly and annual totals, then applies category-specific formulas for 1031 Exchange.
- Intermediate values are rounded for display, but calculations preserve precision until final totals are shown.
- Scenario outputs compare baseline values against changed inputs so you can estimate tradeoffs quickly.
Assumptions
- Inputs are treated as stable over the time period you select.
- Rates and costs are assumed to remain constant unless you model a change manually.
- Results are planning estimates, not a lender quote, tax filing output, or legal advice.
Worked Examples
Conservative scenario
Increase key costs by 10% and reduce expected upside by 10%.
If the result still works, your plan likely has a practical safety margin.
Optimized scenario
Adjust one or two controllable levers (rate, payment, timeline, or contribution).
Compare whether the gain is meaningful enough to justify the extra effort.
When This Estimate Breaks
- Your actual numbers can differ when taxes, fees, policy rules, or market pricing change.
- Large life changes (income shifts, relocation, new debt, job changes) can invalidate assumptions quickly.
- Use this estimate with real quotes/statements before making a final financial decision.
Methodology and Editorial Review
- The model computes a baseline from your entered inputs, then recalculates results for each scenario change.
- Displayed values are rounded for readability while internal calculations keep precision until output formatting.
- Editorial review validates formula consistency, assumptions, and user-facing interpretation text.
Author: Affordably Editorial Team
Financial review: Affordably Financial Review Team
Sources and Last Updated
- Consumer Financial Protection Bureau
- Federal Reserve Economic Data (FRED)
- IRS (Tax Topics and Instructions)
Last updated: February 20, 2026
Related Resources
Explore this topical cluster: Personal Finance Planning
Related Calculators
How 1031 Exchange Calculator Works
Calculate tax savings from a 1031 exchange, which allows you to defer capital gains taxes when selling an investment property by reinvesting into a "like-kind" property. This powerful tool keeps more capital working for you.
1
Calculate Gain on Sale
Determine capital gain: sale price minus adjusted basis (original price + improvements - depreciation taken). This is what would be taxed without a 1031.
2
Estimate Tax Without 1031
Calculate federal capital gains tax (15-20%) plus depreciation recapture (25%) plus state taxes. This is what you'd owe if selling normally.
3
Identify Replacement Property
Find a like-kind property (any real estate for real estate) to purchase. Must be identified within 45 days of sale.
4
Ensure Equal or Greater Value
To defer ALL taxes, replacement property must cost at least as much as the sales price, and all proceeds must be reinvested.
5
Calculate Tax Deferred
See the full amount of taxes deferred. This becomes additional capital to invest and compound.
6
Project Long-Term Benefits
Model how deferring taxes and investing the full amount compounds over time compared to paying taxes and investing less.
Key Factors Considered:
- ✓Capital gain amount
- ✓Depreciation recapture amount
- ✓Federal and state tax rates
- ✓Replacement property value
- ✓Debt on relinquished property
- ✓Cash boot received (triggers partial tax)
- ✓Timeline compliance (45/180 day rules)
- ✓Qualified intermediary costs
Benefits of 1031 Exchange
- Defer federal capital gains tax (15-20%)
- Defer depreciation recapture tax (25%)
- Defer state capital gains taxes
- Keep more capital working and compounding
- Consolidate multiple properties into one
- Diversify from one property to several
- Relocate investments to better markets
- Upgrade to larger or better properties
- Pass properties to heirs with stepped-up basis
Key Terms to Know
- Like-Kind Property
- Any real estate held for investment or business use. Broad definition: apartments, offices, land, retail all qualify. Personal residence does NOT qualify.
- Qualified Intermediary (QI)
- Third party who holds sale proceeds and facilitates exchange. REQUIRED - you cannot touch the money. QI costs $500-1,500.
- 45-Day Rule
- You must identify potential replacement properties in writing within 45 days of selling. Can identify up to 3 properties (or more under certain rules).
- 180-Day Rule
- Must close on replacement property within 180 days of selling original property. Strict deadline - no extensions.
- Boot
- Cash or non-like-kind property received in exchange. Boot is taxable even in 1031 exchange. Example: if you receive $50k cash, that $50k is taxed.
- Depreciation Recapture
- Accumulated depreciation deductions that are "recaptured" and taxed at 25% when selling. 1031 defers this too.
Pro Tips
- →Line up replacement properties BEFORE selling - 45 days goes fast
- →Use a qualified intermediary - touching proceeds disqualifies exchange
- →Replacement must equal or exceed sale price to defer ALL taxes
- →Debt replaced must equal or exceed debt on sold property
- →Any cash received (boot) is taxable even in a valid 1031
- →Can exchange into multiple properties or consolidate many into one
- →Reverse 1031: buy replacement first, then sell (more complex)
- →You can 1031 indefinitely - "swap 'til you drop" strategy
- →At death, heirs get stepped-up basis and deferred gains are forgiven
- →Primary residence doesn't qualify, but converted rentals can
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How These Results Are Calculated
Each calculator uses standard financial formulas and explicit assumptions to generate educational estimates. Results are based on your inputs and may vary based on rates, taxes, fees, and local market conditions.
- Public data sources include the IRS, BLS, Census, Federal Reserve, and state agencies.
- Calculators are reviewed periodically to reflect market and tax-rule changes.
- These results do not replace personalized professional advice.
GA
Reviewed by the Founder of GetAffordably
This content was created with AI assistance and reviewed by the founder of GetAffordably. Financial data is sourced from the U.S. Census Bureau, Federal Reserve, IRS, and other public records, and is verified periodically.
Last updated: June 2026