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1031 Exchange Calculator

Estimate the federal capital gains tax, depreciation recapture, NIIT, and state tax you can defer by completing a properly structured 1031 exchange instead of an outright cash sale.  replacement property before the exchange deadline.

1031 Exchange Calculator

Estimate the federal capital gains tax, depreciation recapture, NIIT, and state tax you can defer by completing a properly structured 1031 exchange instead of an outright cash sale.

This calculator is for educational and planning use only. It does not collect, transmit, or store any data — all calculations run inside your browser. Federal and state tax brackets change. Results are estimates and should not be relied on as legal, tax, or financial advice. Confirm any exchange structure with a CPA or qualified tax advisor before closing.

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Free, Instant, and Backed by a CPA-Led Qualified Intermediary

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Federal LTCG Tax Deferred
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Depreciation Recapture Deferred
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State Tax Deferred

Improvement 1031 exchanges combine the mechanics of a reverse exchange with active construction or improvements happening on the replacement property during the 180-day window. The EAT holds title while the work is being done. Universal Pacific 1031 handles the EAT formation, the construction payment disbursements from your exchange funds, the timeline tracking of improvements counted toward like-kind value, and the final title transfer once the work is complete.

What the Calculator Tells You

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Tax Owed If You Sell Outright
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Tax Deferred via 1031 Exchange
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Minimum Replacement Property Value

Every build-to-suit exchange has a different construction profile: ground-up new construction, major renovation of an acquired property, leasehold improvements on commercial space. Universal Pacific 1031 tailors the structure to your specific project. We work with your contractor, lender, and CPA to make sure the funds are released according to the construction schedule and that the improvements completed by day 180 are properly counted toward the like-kind value requirement.

How the 1031 Exchange Calculator Estimates Your Tax Deferral

This calculator estimates four tax components that a properly structured 1031 exchange defers when you reinvest sale proceeds into qualifying replacement real estate. Depreciation recapture (Section 1250): Depreciation previously claimed is recaptured at up to 25% in an outright sale; a 1031 exchange defers this entirely when basis carries forward into the replacement property. Federal capital gains tax: 0%, 15%, or 20% on the non-depreciation portion of the gain, applied based on your filing status and total taxable income. Net Investment Income Tax (NIIT): An additional 3.8% on net investment income above $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). State capital gains tax: Most states tax capital gains as ordinary income. Top marginal rates range from 0% (Florida, Texas, Nevada, Washington, and a handful of others) to 13.3% (California). Most states honor the federal 1031 deferral; confirm your state’s conformity with your CPA.

Compliance with IRS Section 1031 Deadlines

Improvement exchanges qualify under the same safe harbor as reverse exchanges, Revenue Procedure 2000-37. The EAT must hold title throughout the construction period. Only the value of the property plus improvements completed by day 180 counts toward the exchange. Work completed after day 180 does not count toward the like-kind value, and any shortfall becomes taxable boot. We monitor the construction milestones and coordinate the final title transfer on day 180 to keep the qualifying value as high as possible. Review the tax treatment with your CPA or tax advisor before structuring the exchange.

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Replacement Property Requirements for Full Deferral

Funding construction inside a 1031 exchange requires precise disbursement timing. Your exchange funds are held in a segregated account by the qualified intermediary. As the contractor invoices come in, we release payments through the EAT, which holds title to the replacement property. The structure keeps you from having constructive receipt of the funds during the parking period, which preserves the safe harbor under Revenue Procedure 2000-37.

How It Works

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Sale Price & Selling Expenses

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Original Basis & Depreciation

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Filing Status & State

After your first consultation, we map the construction schedule against the 180-day exchange period. You get a written timeline, payment disbursement schedule, lien-release tracking, and progress reports tied to each construction milestone. At the end of the parking period, the EAT transfers the improved property to you, and your CPA receives the documentation needed for IRS Form 8824.

FAQ

How accurate is this 1031 exchange calculator?

The calculator gives a planning-grade estimate based on 2025 federal tax brackets, top marginal state rates, and the inputs you provide. It captures federal capital gains, depreciation recapture (25% unrecaptured Section 1250), NIIT (3.8% above filing-status thresholds), and state tax. Confirm any specific exchange position with your CPA before closing — AMT, multi-state allocation, installment sales, mortgage debt relief, and partial-year residency can change the result.

Does my data get stored or sent anywhere?

No. The calculator runs entirely in your browser. Sale prices, basis, depreciation, mortgage payoff, and income figures are never submitted to a server. Refresh the page and the data is gone. You can also use the Reset button to clear all fields.

What types of property qualify for a 1031 exchange?

Section 1031 covers real property held for investment, business, or productive use in a trade. This includes rental property, commercial real estate, industrial buildings, raw land held for investment, and most income-producing real estate. Primary residences, second homes used primarily for personal enjoyment, dealer inventory, stocks, bonds, and partnership interests do not qualify. Confirm eligibility with your CPA before initiating the exchange.

What is the minimum replacement property value for full deferral?

To defer 100% of the gain, the replacement property must generally equal or exceed the relinquished property’s sale price, AND all equity (sale price minus mortgage payoff minus exchange expenses) must be reinvested, AND the replacement property must carry at least the same level of debt that was paid off. Reinvesting less, buying a lower-value property, or reducing debt without offsetting cash creates taxable boot. The calculator shows your minimum replacement value and equity available to reinvest.

How long do I have to complete a 1031 exchange?

Two hard IRS deadlines: 45 days from the relinquished property closing to formally identify candidate replacement properties (in writing, to the qualified intermediary), and 180 days from the relinquished property closing (or your tax return due date, whichever is earlier) to close on the identified replacement property. Missing either deadline fails the exchange and triggers full tax recognition in the year of sale.

Do I still owe depreciation recapture if I do a 1031 exchange?

No — not in the year of the exchange. Depreciation recapture (taxed at up to 25% under unrecaptured Section 1250) is deferred along with the rest of the gain when you complete a properly structured 1031 exchange. The depreciation basis carries forward into the replacement property and continues to depreciate from the carried-over basis. The tax is not eliminated; it remains deferred as long as the exchange chain continues.

What happens if my replacement property is worth less than my sale price?

You can still complete a partial 1031 exchange. The portion reinvested into qualifying replacement property remains tax-deferred. The difference (called “boot” — cash, debt relief, or non-like-kind property received) is taxable in the year of the exchange, recognized first as depreciation recapture, then as capital gain. A qualified intermediary can structure the partial exchange to maximize the deferred portion.