Free 1031 Exchange Calculator — Estimate Your Tax Deferral
Selling an investment property? A 1031 like-kind exchange lets you defer capital gains tax, depreciation recapture, and the 3.8% NIIT by rolling your proceeds into replacement property. Enter your numbers below to see exactly how much tax you can defer — and whether boot could make part of your gain taxable.
Total Tax Deferred in a Full Exchange
$52,960
That is the combined federal, NIIT, and state tax you would owe on a straight sale — postponed, not forgiven, until you sell without exchanging.
| Tax component | Taxable amount | Rate | Tax deferred |
|---|---|---|---|
| Amount realized (sale price minus costs) | $470,000 | — | — |
| Total gain | $170,000 | — | — |
| Unrecaptured §1250 gain (depreciation) | $80,000 | 25% | $20,000 |
| Remaining capital gain | $90,000 | 20% | $18,000 |
| Net Investment Income Tax | $170,000 | 3.8% | $6,460 |
| State tax | $170,000 | 5% | $8,500 |
| Total tax deferred | $52,960 |
Estimate only — not tax advice. NIIT applies to taxpayers above the MAGI thresholds ($200k single / $250k joint). State rules vary; some states (like California) claw back deferred gain if you later sell out of state. Consult a CPA or qualified intermediary before acting.
How the 1031 tax deferral is calculated
A 1031 exchange under IRC §1031 lets you sell investment or business real property and reinvest the proceeds into like-kind replacement property while deferring the tax. The calculator above works out what you would owe on a taxable sale, in four layers:
- Depreciation recapture (unrecaptured §1250 gain). Depreciation you claimed is "recaptured" first and taxed at a flat 25% — up to the amount of your total gain. This is often the largest surprise for long-held rentals.
- Federal capital gains. Whatever gain remains after recapture is taxed at your long-term capital gains rate — 15% or 20% for most investors (plus the NIIT layer below).
- Net Investment Income Tax. An extra 3.8% on investment gains for taxpayers over the MAGI thresholds. Many investors forget this layer entirely.
- State tax. Applied to the full gain at your state rate — significant in high-tax states, zero in states with no income tax.
In a valid exchange, every one of these layers is deferred. Your basis carries over to the replacement property, so the tax is postponed — potentially for decades, across multiple exchanges — rather than eliminated.
The 45-day identification and 180-day closing deadlines
Tracking an active exchange? Our 1031 exchange timer counts down both deadlines and checks IRS compliance as you go.