Calculate your 1031 like-kind exchange: deferred gain, boot, minimum replacement property value, and taxes saved.
Commission + closing costs
Federal: 15–20%
Taxes you avoid now
Taxable cash received
| Sale Price | $500,000 |
| Less Selling Costs | -$30,000 |
| Less Adjusted Basis | -$230,000 |
| Total Gain Realized | $240,000 |
| Minimum Replacement Value | $470,000 |
| Replacement Property Price | $600,000 |
| Total Boot (Taxable) | $120,000 |
| Taxable Gain | $120,000 |
| Deferred Gain | $120,000 |
| Tax Owed Now | $24,000 |
| Tax Deferred (Saved Now) | $24,000 |
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Gain Realized = Sale Price − Selling Costs − Adjusted Basis
Boot = Equity Not Reinvested + Mortgage Relief
Taxable Gain = Min(Gain Realized, Boot)
Deferred Gain = Gain Realized − Taxable Gain
A 1031 like-kind exchange lets real estate investors defer capital gains taxes by selling one investment property and buying another of equal or greater value. You have 45 days to identify replacement property and 180 days to close.
Boot is cash or non-like-kind property received in an exchange. If you buy a cheaper replacement or keep some cash, that's boot — and it's taxable. To defer ALL taxes, reinvest all equity into equal-or-greater value property.
No. Section 1031 applies to investment and business properties only. Primary residences qualify for the Section 121 exclusion ($250K/$500K) instead.
Day 0: You close on the sold property. Day 45: Identify up to 3 potential replacement properties (or more with the 200% rule). Day 180: Close on replacement property. Miss either deadline, and the exchange fails — you owe taxes.
They 'carry forward' to the replacement property, reducing its basis. When you eventually sell without exchanging again, you pay all accumulated deferred taxes. Or you can continue exchanging indefinitely, potentially passing stepped-up basis to heirs at death.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.