1031 Exchange Calculator

📅 Deadline Tracker

Relinquished Sale Date

45-Day ID Deadline

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180-Day Exchange Deadline

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💰 Tax Savings Estimator

Sale Price

Adjusted Basis

Closing Costs

Potential Capital Gain

Est. Tax if Refinanced/Sold

1031 Deferred Savings

Mastering the 1031 Exchange Rules

A 1031 Exchange is one of the most powerful wealth-building tools in commercial real estate. It allows you to sell a property and defer ALL capital gains taxes by reinvesting into a "like-kind" property.

The Identification Clock

The biggest risk in a 1031 is the **45-day Identification Period**. From the day you close on your sale, you have exactly 45 calendar days to name potential replacement properties. If you hit day 46 without a formal ID letter, you must pay the tax.

Equal or Greater Value

To defer 100% of your taxes, you must buy a replacement property that meets two tests: 1. **Purchase Price** must be equal or greater than your Net Sales Price. 2. **Debt** must be equal or greater than the debt you paid off. If you take any cash out or reduce your debt, that amount is considered **"Boot"** and is taxable.

Related Tools

Expert FAQ

What is the "45-Day Identification Rule"?

From the date of the sale of your relinquished property, you have exactly 45 calendar days to identify potential replacement properties in writing to your Qualified Intermediary (QI). This deadline is strict and includes weekends and holidays; failure to meet it disqualifies the exchange.

What is "Boot" in a 1031 exchange?

"Boot" refers to any non-like-kind property received in an exchange, such as cash proceeds or a reduction in mortgage debt. Boot is taxable to the extent of the gain. To avoid all taxes, you must reinvest all net proceeds and acquire debt equal to or greater than the debt on the relinquished property.

Can I sell a vacation home in a 1031 exchange?

Only if it qualifies as an investment property. The IRS (under Safe Harbor Revenue Procedure 2008-16) generally requires that you owned the property for at least 24 months, rented it out for at least 14 days per year at fair market rent, and limited your personal use to 14 days or 10% of the rental days.

What is the "180-Day Exchange Period"?

You must close on your replacement property within 180 calendar days of the sale of your relinquished property, or by the due date of your tax return for that year (including extensions), whichever is earlier. Like the 45-day rule, this period begins on the day of the sale.

What is the "Three-Property Rule"?

Under the identification rules, you can identify up to three potential replacement properties of any value. Alternatively, you can use the "200% Rule," where you identify any number of properties as long as their combined fair market value does not exceed 200% of the value of the property you sold.

Do I need a Qualified Intermediary (QI)?

Yes. To maintain the 1031 tax-deferred status, the seller must never have "constructive receipt" of the sale proceeds. A Qualified Intermediary must hold the funds in a separate account and facilitate the transfer to the seller of the replacement property.