Real Estate Exchange Tax Deferral Calculator
Calculate how much capital gains tax you can defer by reinvesting your real estate sale proceeds into like-kind property, versus the tax owed if you take cash out.
Quick answer: A 1031 exchange defers capital gains tax on investment real estate if you reinvest fully into like-kind property. Calculate deferred gain versus taxable gain if cash is kept out. Enter Gross Sale Price of Relinquished Property, Adjusted Tax Basis Before Sale, Cash or Other Non-Like-Kind Value Received, and Illustrative Combined Tax Rate to personalize the estimate. It returns Potentially Deferred Gain if Exchange Qualifies, Potentially Recognized Gain From Boot, and Illustrative Tax on Recognized Boot so you can compare the impact before choosing a next step. Use it to estimate tax impact, withholding, deduction, bracket, and after-tax cash-flow tradeoffs.
Your preliminary realized gain is $500,000. If this is a qualifying exchange, up to $500,000 may remain unrecognized in this simplified estimate.
$0 is treated as potential boot here, with an illustrative $0 tax exposure. Verify property eligibility, the 45-day identification deadline, the 180-day receipt deadline, and Form 8824 reporting.
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A 1031 exchange defers capital gains tax on investment real estate if you reinvest fully into like-kind property. Calculate deferred gain versus taxable gain if cash is kept out.
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This is an educational estimate, not tax, legal, investment, or lending advice. Confirm with a qualified professional or the provider before acting.
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Everything you need to know.
What does an example 1031 Exchange Calculator calculation look like?
What happens to my deferred gain if I do a qualifying exchange?
Why does keeping cash out of the exchange trigger immediate taxes?
Is the Real Estate Exchange Tax Deferral Calculator free to use?
Does using the Real Estate Exchange Tax Deferral Calculator affect my credit score?
Are the results personalized financial advice?
What should I do after seeing the result?
How does SwitchWize choose related offers?
How fresh are the rates and offers shown?
Where can I see the ranking methodology?
Can Money Map use this result?
Why This Matters
When you sell investment real estate and immediately reinvest the full proceeds into similar property, you can defer capital gains tax on the entire gain. However, if you retain any cash or receive other assets, that portion becomes taxable in the year of sale. Understanding the split between deferred and recognized gain helps you plan whether a full reinvestment makes financial sense for your situation.
How to Use It
- 1Enter the gross sale price of the property you are selling.
- 2Enter your adjusted tax basis: the original purchase price plus capital improvements, minus depreciation claimed.
- 3Enter any cash or non-like-kind property you receive (if keeping proceeds or taking a mortgage note, for example).
- 4Enter your combined federal and state marginal tax rate to estimate your tax liability on any recognized gain.
- 5Confirm whether both the relinquished and replacement property are held for business or investment use.
- 6Review the four outputs: recognized gain from boot received, deferred gain if the exchange qualifies, estimated tax on the recognized portion, and a flag showing whether the exchange meets qualification requirements.
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