1031 Exchange Calculator
Track your critical deadlines and estimate potential tax savings from a like-kind exchange.
📅 Deadline Tracker
💰 Tax Savings Estimator
*Estimate assumes ~25% blended capital gains tax rate (federal + state). Consult a tax advisor for your specific situation.
What is a 1031 Exchange?
A 1031 Exchange, named after Section 1031 of the Internal Revenue Code, allows real estate investors to defer capital gains taxes when selling an investment property, as long as they reinvest the proceeds into a "like-kind" replacement property.
Key Rules:
- 45-Day Rule: You must identify potential replacement properties within 45 days of selling your property.
- 180-Day Rule: You must close on the replacement property within 180 days of selling your property.
- Like-Kind: Both properties must be held for investment or business use (not personal residences).
- Equal or Greater Value: To defer 100% of the gain, the replacement property must be of equal or greater value.
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Frequently Asked Questions
What is the 45-Day Identification Rule?
You must identify potential replacement properties in writing within 45 days of closing the sale of your relinquished property. This deadline is strict and includes weekends and holidays.
Can I do a 1031 exchange on my personal residence?
No. Section 1031 only applies to property held for productive use in a trade or business or for investment. Personal residences do not qualify.
What happens if I miss the 180-day deadline?
If you do not close on the replacement property by the 180th day (or your tax return due date, whichever is earlier), the exchange is disqualified and the capital gains tax becomes due.
Does the replacement property have to be the exact same type?
No. "Like-kind" is defined broadly. You can exchange an apartment building for raw land, or an office building for a retail center, as long as both are real estate held for investment.
What is "Boot"?
Boot is any non-like-kind property received in the exchange, such as cash or debt relief. Boot is generally taxable to the extent of the gain realized.