1031 Exchange Savings Calculator

Selling investment property without a 1031 exchange can cost you 15% to 20% of your gains immediately — before you reinvest a single dollar. According to the IRS Publication 544, a like-kind exchange under Section 1031 of the Internal Revenue Code allows you to defer capital gains tax when you sell one investment property and reinvest the proceeds into another qualifying property. The math compounds over time: a $500,000 gain deferred today and reinvested for 10 years at 7% annual growth generates roughly $285,000 in additional equity that a taxed investor simply cannot access. The 45-day identification window and 180-day closing deadline create real pressure. This 1031 exchange calculator quantifies the capital gains tax liability you would owe without a 1031, the deferred tax amount, and the reinvestment capital advantage you gain by using the exchange.

This calculator estimates the capital gains tax liability on an investment property sale, both with and without a 1031 exchange. Enter your original purchase price (basis), sale price, depreciation recapture amount, federal capital gains tax rate, and state tax rate. The calculator returns your taxable gain, depreciation recapture tax, total tax without a 1031, deferred tax amount, and available reinvestment capital with and without the exchange. Use it to evaluate whether a 1031 makes financial sense and to estimate equity growth on the deferred position over a chosen time horizon.