Like-Kind 1031 Exchange Calculator for Deferred Gain
Estimate the gain a U.S. real-property exchange recognizes versus defers, with cash boot, debt relief and any ordinary recapture you've confirmed.
What This Calculator Does
For one qualifying 1031 exchange of U.S. real property, this calculator compares the gain you recognize with the gain you defer. You enter documented prices, debt, full adjusted basis and eligible costs on the sale side and the purchase side, along with the ordinary recapture already worked out for Form 8824, line 21. From there, the ledger shows how boot interacts with that recapture. It doesn't compute tax owed or decide eligibility.
Who Is This For
The estimate is built for property investors and real estate professionals, and you should go over it with your qualified intermediary and tax adviser. Every amount belongs to a single taxpayer holding a single ownership interest. Your exchange equity goes toward the replacement first, and personal cash fills only the gap. If you take a separate cash withdrawal and also make a personal contribution, that combination sits outside the model. The tool also won't split a swap among co-owners or across several assets. It won't prepare Form 8824. It won't set the basis of your new property, either.
How It Works
You'll fill in eight dollar amounts, and you enter 0 wherever an item doesn't apply. Eligible selling costs and eligible costs of buying the replacement go in their own boxes and are never combined. Enter your adjusted basis in full. Ordinary recapture comes from your line 21 work done elsewhere, and it stays 0 only once you've confirmed there isn't any. After the numbers run, check gain, boot and recapture before you export.
Frequently Asked Questions
Is my recognized gain the tax I owe?
No. Recognized gain is the portion of your gain the modeled rules count now, and it isn't a tax figure. Everything starts from realized gain: sale price, less eligible costs on the sale and purchase sides, less your complete adjusted basis. Any positive gain left after that is deferred. The tool doesn't work out tax rates or what character the rest of the gain has, and it leaves out NIIT, state tax and withholding as well. A result of 0 recognized gain doesn't prove your tax bill is zero.
Which properties qualify, and which deadlines should I check first?
Generally, Section 1031 covers qualifying real property held as an investment or used in your trade or business, traded for like-kind real property. This estimator doesn't cover your personal residence, nor does it cover property held mainly for resale. In a deferred swap, you generally identify the replacement within 45 days, and it generally has to be received by whichever comes first: 180 days, or the due date of your return, including extensions. Ask your qualified intermediary and tax adviser to verify the property, how the deal is set up, each deadline and the rules for receiving funds. No result here approves a swap.
What goes into adjusted basis, and does paying off my mortgage reduce my gain?
Your full adjusted tax basis, as your records show it. Take the original basis that applies, add eligible costs from your original purchase and any capital improvements, then take out required reductions, depreciation allowed or allowable among them. Don't use the original purchase price by itself as your basis. Don't double-count depreciation. Paying down mortgage principal doesn't cut realized gain; it changes the equity and debt-relief math instead. Costs from your original purchase belong inside the basis you enter, where they apply. Costs of buying this replacement go in their own field.
Why do costs from the sale and from the replacement purchase both count?
IRS Publication 544 ties eligible exchange expenses both to the property you give up and to the replacement, so costs on each side count. The model lets confirmed eligible costs on either side shrink realized gain and offset cash boot too. Whether a given charge qualifies is for the intermediary or adviser to classify; a closing statement alone can't settle it. Prorated taxes and rent stay out, and so do repairs, loan expenses and any deposit. An acquisition charge must not show up twice, once in expenses and again in price or basis. On screen, equity and net cash boot are tax-ledger figures, not an escrow balance or the closing wire.
How are cash boot and debt-relief boot figured?
Boot is any value you receive that isn't like-kind property. The tool measures it as net cash received or net relief from debt, weighing the equity left after all eligible costs against the equity that goes toward the replacement price. Exchange equity goes in first, and personal cash covers only what is still short. Adding cash can offset debt relief, but new debt won't erase cash boot. The model assumes the old loan is paid off in full with no part forgiven, and that the replacement loan stays at or below the replacement price. Pulling out a separate cash withdrawal while also contributing personal cash calls for review outside the model, as do other complex money flows.
Why can't I add ordinary recapture to the boot limit?
Line 21's ordinary recapture is recognized first. Beyond it, recognized gain equals the gain capped by boot, less that recapture, and it is always at least 0. Take a case without costs: a $220,000 sale, a $100,000 basis and $80,000 of old debt, followed by a $250,000 purchase financed with $150,000 of new debt. That yields $120,000 of realized gain and $40,000 of boot. If ordinary recapture worked out elsewhere comes to $50,000, the total gain recognized comes to $50,000 rather than $90,000, with $70,000 deferred. Accumulated depreciation can't replace the ordinary recapture figure, and unrecaptured Section 1250 gain can't either.
What happens if I don't buy a replacement, or I have a loss?
Any positive realized gain becomes fully recognized when you enter a replacement price of exactly 0, which models an incomplete swap. A realized loss stays negative, and this 1031 estimate recognizes no loss. With a loss, deferred gain is 0. None of this shows that a loss is deductible, or that a refund or tax credit is due. When there's no positive gain, enter 0 for ordinary recapture. Your adviser decides how a failed swap or a loss gets handled; the tool doesn't.
What does a professional need to calculate separately?
Eligibility, your full adjusted basis, the expenses that qualify and Form 8824 line 21 are all settled outside the tool. It doesn't allocate across several assets or calculate replacement basis. Combining Section 121 with 1031 isn't modeled, and neither are installment sales. Related-party rules aren't applied. Have your qualified intermediary and tax adviser go over your closing statements and financing terms. The 2025 editions of IRS Publication 544 and the Form 8824 instructions are the ones cited. Sources were checked October 2, 2026, with rules as of September 30, 2026.