1031 Exchange Calculator.

1031 Real Estate Exchange Calculator

This calculator will help you to determine the tax deferment you will realize by performing a 1031 tax exchange rather than a taxable sale.

For your convenience current mortgage rates are published below.

Cost Basis Amount
Original purchase price:
Capital improvements:
Accumulated depreciation:
Sales Price & Mortgage Balance Amount
Sales price:
Selling expenses:
Mortgage loan balances at sale ($):
State & Federal Taxes Amount
State capital gains rate (%):
Federal capital gains rate (%):
Net Basis & Capital Gains Tax Amount
Net adjusted basis:
Capital gain:
Depreciation recapture (25%):
Federal capital gains tax:
State capital gains tax:
Total taxes due:
Gross Equity & Reinvestment Amount
Gross equity:
After-tax equity:
Sale reinvestment (after-tax equity X 4):
Exchange reinvestment (gross equity X 4):
Date of transfer of your relinquished property:
45th day:
180th day:

Current Mortgage Rates

We publish current mortgage rates. homebuyers and refinancers can use the filters at the top of the table to see the monthly payments and rates availble for their loans.

Getting Clear on Section 1031

People Carrying Money.

Through the advantageous Section 1031 of the US Internal Revenue Code, homeowners and real estate investors alike find that it is indeed possible to acquire or get rid of a property, building or investment without dealing with the hassle and expense of taxes. 1031 refers to an exchange of business or real estate investments between two parties in which tax may be deferred at the time of sale – or swap – until later. For major developers and investors, this regulation makes an enormous difference in the finances, paperwork, and commitment surrounding the daunting tax structure when it comes to investment.

While investors and exchangers will still need to face the details of the appropriate taxes in the future, the delay is enough to save everyone significant amounts of money and make the whole process of property exchange far more inviting and feasible. The way it works in the current market is that the investment stays tax deferred until the holder makes a sale of it or cashes out, at which point it is then hit with a long term capital gains tax rate. While this percentage taken out may be significant, it is nowhere near as costly as if taxes had been due on the property all along.

How Much Will You Save from 1031?

The 1031 like kind exchange has no attached stipulations on how often or for how many investments it can be used. It simply serves to change the form of the real estate from what would be a sale to a swap so that the investment can continue to grow as it would otherwise with its tax deferred until a later date.

If a 1031 exchange rather than a traditional taxable sale is appropriate for your transaction of real estate investment, it is simple to figure out the dollar amount that you will save by simply realizing that handy tax deferral. By inputting the details of your exchange – including federal and state capital gains rate, depreciation, improvements made, and selling expenses – you will be able to see the clear advantage that a 1031 swap gives you over the traditional sell.

Investors should be aware that 1031 does not generally apply to personal private real estate dealings, such as home exchanges, but that it does cover some personal property. Consult your accountant for details on what might fall under the 1031 umbrella and what will not.

Another point of note to be aware of regarding the 1031 opportunity is that ideal swaps are hard to find and the exchange may not always occur between only two parties as you might think. In fact, most of the 1031 exchanges that go on are delayed. Essentially, the investor theoretically trades money for the property that they want even before they have found a party who desires their holding investment. Transactions of this nature often involve a third party or middle man who handles the details of the cash exchange and works to handle both the bought and sold property. Exchanges like this are not true swaps, but are considered swaps under the 1031 regulation. This makes it simpler for investors to exchange properties even though they may not find the right investment while simultaneously finding a buyer for the one they currently hold.

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