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1031 Exchange Calculator
A 1031 Exchange allows you to defer paying capital gains taxes when you sell an investment property and reinvest the proceeds into a 'like-kind' property.
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How to use this calculator
- Enter the original purchase price and the new sale price.
- Add your selling costs and any depreciation you've claimed over the years.
- Select your federal tax bracket and state to estimate your tax rates.
- Enter the value of the replacement property you plan to buy.
What your results mean
To defer ALL taxes, you must buy a replacement property of equal or greater value than your net sales price, and reinvest all your cash equity. The calculator shows your potential tax liability and the minimums required for a full exchange.
5 crucial tips for a 1031 exchange
- You must use a Qualified Intermediary (QI). If you touch the cash from the sale, the exchange is void.
- The 45-day rule is strict: you have exactly 45 days from closing to identify potential replacement properties.
- The 180-day rule is strict: you must close on the replacement property within 180 days of selling the old one.
- 'Like-kind' is broad. You can exchange a single-family rental for an apartment building, or raw land for a commercial strip center.
- You cannot do a 1031 exchange on your primary residence (use the Section 121 exclusion for that).