1031 Exchange Calculator

Calculations follow standard gain accounting concepts: realized gain = net proceeds minus adjusted basis; recognized gain is the portion taxable today (commonly boot and certain debt relief); deferred gain is the remaining realized gain that is deferred under Section 1031 when like-kind replacement requirements are satisfied.

Key quantitative rules implemented: effective boot combines cash boot and positive net debt relief; recognized gain cannot exceed realized gain; deferred gain = realized gain − recognized gain. Estimated tax due = recognized gain × capital gains tax rate entered by the user.

This tool is an estimator. Precision and reliability are improved by cross-checking with formal closing statements, loan payoff figures, and advice from a tax professional. For software QA and numeric stability this implementation follows engineering best practices for unit testing and numeric range checks in line with standards for reliable computation.

Use the standard deferral mode for most forward exchanges, the partial mode when cash or non-like-kind property is involved, and the reverse mode when you acquire replacement property before relinquishing the old property.

Always reconcile calculator outputs with actual settlement statements and consult a tax advisor to confirm tax treatment and filing requirements.

Example 1 (Full deferral): Relinquished sale price 500,000, adjusted basis 200,000, no boot, replacement purchase 600,000 → recognized gain = 0, deferred gain = 300,000.

Example 2 (Partial): Same sale but you receive 50,000 in cash boot → recognized gain = 50,000, tax due = 50,000 × your entered tax rate.