1031 exchange calculator

Free 1031 exchange calculator for CRE investors: compute your 45/180-day IRS deadlines, realized gain, taxable boot, and capital gain deferral verdict.

Sale (Closing) Date

The date escrow closes on the relinquished property — this starts the 45/180-day clocks.

Sale Price (Relinquished Property) — $

Gross sales price before deducting selling costs.

Adjusted Tax Basis — $

Original purchase price plus capital improvements, minus total depreciation taken.

Selling Costs — $

Broker commissions, title fees, transfer taxes, and other closing costs on the sale.

Replacement Property Price — $

Purchase price of the replacement property (must close by the 180-day deadline).

Replacement Property Debt — $

Mortgage or loan assumed/incurred on the replacement property.

Depreciation Taken to Date (optional) — $

Total depreciation deductions claimed over your hold. Used only to estimate §1250 recapture exposure if you do NOT achieve full deferral. Leave at 0 if unknown. In a full 1031 exchange, recapture is deferred along with the gain.

1031 Exchange Outcome

Full Deferral

Replacement property price ($2,100,000) ≥ net proceeds ($1,880,000). All $680,000 of realized gain may be deferred — confirm with your QI/CPA.

45-Day ID Deadline: Mar 1, 2026You must identify replacement property by midnight of this date (45 calendar days from Jan 15, 2026).
180-Day Close Deadline: Jul 14, 2026You must close on replacement property by this date (180 calendar days from Jan 15, 2026).
Realized Gain: $680,000Sale Price − Selling Costs − Adjusted Basis
Boot (Taxable in Year of Sale): $0No boot — full reinvestment in replacement property.
Depr. Recapture Exposure (25% — ESTIMATE): $0 — deferredIn a full 1031 exchange, §1250 depreciation recapture is deferred along with the capital gain. It is not taxed now — confirm with your CPA.
Deferral Verdict: Full DeferralReplacement property price ($2,100,000) ≥ net proceeds ($1,880,000). All $680,000 of realized gain may be deferred — confirm with your QI/CPA.

Not tax advice — confirm with your QI/CPA.

1031 Exchange Outcome

Full Deferral

Replacement property price ($2,100,000) ≥ net proceeds ($1,880,000). All $680,000 of realized gain may be deferred — confirm with your QI/CPA.

45-Day ID Deadline: Mar 1, 2026You must identify replacement property by midnight of this date (45 calendar days from Jan 15, 2026).
180-Day Close Deadline: Jul 14, 2026You must close on replacement property by this date (180 calendar days from Jan 15, 2026).
Realized Gain: $680,000Sale Price − Selling Costs − Adjusted Basis
Boot (Taxable in Year of Sale): $0No boot — full reinvestment in replacement property.
Depr. Recapture Exposure (25% — ESTIMATE): $0 — deferredIn a full 1031 exchange, §1250 depreciation recapture is deferred along with the capital gain. It is not taxed now — confirm with your CPA.
Deferral Verdict: Full DeferralReplacement property price ($2,100,000) ≥ net proceeds ($1,880,000). All $680,000 of realized gain may be deferred — confirm with your QI/CPA.

Not tax advice — confirm with your QI/CPA.

Where AI changes the answer

A 1031 exchange is one of the most powerful tax-deferral tools in commercial real estate — and one of the most deadline-driven. Miss the 45-day identification window or the 180-day closing window by a single day and the entire deferral collapses, triggering capital gains tax on the full realized gain in the year of sale. This 1031 exchange calculator computes both IRS deadlines from your actual sale date and shows your deferral outcome — but the real question is how AI changes your strategy before and after you hit "calculate." **Where AI changes the 1031 exchange outcome:** **1. Deadline tracking and calendar alerts.** The 45-day identification deadline and the 180-day closing deadline are hard IRS rules — they do not extend for weekends, holidays, or market delays. AI can monitor your transaction timeline in real time and surface early-warning alerts when your pipeline is at risk of a blown deadline. For CRE teams managing multiple dispositions simultaneously, this is the highest-impact use: never miss a 1031 window because a closing slipped. **2. Boot minimization strategy.** Boot — cash or mortgage-relief received in a 1031 exchange — is taxable in the year of sale even if every other dollar of gain is deferred. The amount of boot you generate depends directly on the replacement property price relative to your net proceeds, and on the debt structure of both properties. AI can model dozens of replacement property scenarios in seconds, identifying the minimum replacement price needed to achieve full deferral versus partial deferral — and flagging when adding a small amount of additional equity or debt eliminates boot entirely. **3. Three-property and 200% identification-rule strategy.** The IRS allows you to identify up to three replacement properties without regard to value (the Three-Property Rule), or any number of properties as long as their combined fair market value does not exceed 200% of the relinquished property's value (the 200% Rule). AI can help you model identification lists that maximize optionality while staying inside the IRS rules — a decision that is surprisingly nuanced when markets are moving. **4. Depreciation recapture planning.** Unrecaptured §1250 depreciation is taxed at a maximum rate of 25% — separate from the long-term capital gains rate. This calculator estimates your recapture exposure based on a simplified depreciation model. The actual recapture amount depends on the total depreciation taken over your holding period, any bonus depreciation claimed, and your individual tax profile. AI can surface the recapture estimate early in a disposition analysis, so you can decide whether a 1031 exchange (which defers the recapture) or a tax-year installment sale (which may spread it) is the better structure. This is an ESTIMATE — confirm actual depreciation and recapture amounts with your CPA. **What this calculator does not replace.** This tool is decision-support for CRE investors sizing a 1031 exchange. It does not account for state tax treatment (some states do not conform to federal 1031 rules), Qualified Opportunity Zone stacking, reverse exchanges, or improvement exchanges. Not tax advice — confirm with your Qualified Intermediary (QI) and CPA before closing any exchange transaction.

Questions real estate teams ask

What is a 1031 exchange and how does it work?

A 1031 exchange (also called a like-kind exchange) allows a CRE investor to defer federal capital gains tax on the sale of an investment property by reinvesting the proceeds into a 'like-kind' replacement property. The IRS requires you to use a Qualified Intermediary (QI) to hold the proceeds between sale and purchase — you cannot receive the cash directly. The exchange must meet two hard deadlines: you must identify replacement property within 45 calendar days of closing, and you must close on it within 180 calendar days. If you meet those rules and reinvest all your net proceeds (no boot), your entire realized gain is deferred until you sell the replacement property in a taxable sale.

What are the 45-day and 180-day rules in a 1031 exchange?

The 45-day identification rule requires you to identify your replacement property (in writing, delivered to the QI or seller) within 45 calendar days of the closing date of your relinquished property. The 180-day closing rule requires you to close on the replacement property within 180 calendar days of the same closing date — or by the due date of your tax return for the year of sale (including extensions), whichever comes first. Both deadlines are absolute — they do not extend for weekends, holidays, title issues, or lender delays. Missing either deadline by a single day voids the entire exchange and makes the full realized gain taxable in the year of sale.

What is boot in a 1031 exchange and how do I avoid it?

Boot is any cash or other non-like-kind property you receive in a 1031 exchange — and it is taxable in the year of sale, even if the rest of your gain is deferred. Cash boot occurs when your replacement property price is less than your net sale proceeds (sale price minus selling costs). Mortgage-relief boot occurs when the debt on your replacement property is less than the debt on your relinquished property — the difference is treated as cash received. To avoid boot entirely, your replacement property price must equal or exceed your net proceeds AND your replacement debt must equal or exceed your relinquished debt. If you cannot fully avoid boot, consider adding equity to the replacement purchase or identifying a higher-priced property to minimize the taxable amount.

What is depreciation recapture in a 1031 exchange?

When you sell a depreciated investment property, the IRS recaptures the depreciation you took at a maximum rate of 25% (the §1250 unrecaptured depreciation rate) — separate from the long-term capital gains rate of 0%, 15%, or 20% that applies to the remaining gain. A 1031 exchange defers the entire realized gain, including the depreciation recapture portion. However, the recapture carries forward to the replacement property — when you eventually sell in a taxable sale, you pay recapture tax on the cumulative depreciation from both the relinquished and replacement properties. The 25% rate shown in this calculator is an ESTIMATE; actual recapture depends on total depreciation taken, bonus depreciation elected, and your specific tax profile. Confirm with your CPA.

Do I need a Qualified Intermediary for a 1031 exchange?

Yes. The IRS requires a Qualified Intermediary (QI) — also called an exchange accommodator — to facilitate a deferred 1031 exchange. The QI holds the sale proceeds from the relinquished property and releases them to purchase the replacement property. You cannot receive the funds directly at any point — doing so 'taints' the exchange and makes the gain immediately taxable. The QI also prepares the required exchange documentation. QI fees typically range from $800 to $2,000 for a standard deferred exchange, and are a closing cost on the sale. This calculator does not substitute for QI advice — always engage a licensed QI before your relinquished property closes.

See how we build this →

More free CRE tools

Cap Rate Calculator for CRE Investors
Free cap rate calculator: enter NOI and property value to get your capitalization rate in seconds — built for CRE investors sizing up acquisition targets.
DSCR Calculator for CRE Investors
Free dscr calculator: enter NOI and annual debt service to check your debt coverage ratio — built for CRE investors sizing lender-ready acquisitions.
NOI Calculator for Real Estate Investors
Free noi calculator: enter effective gross income and operating expenses to compute net operating income — for CRE investors building accurate underwriting.