1031 Exchange Calculator

The 1031 Exchange Calculator estimates realized gain, cash boot, mortgage boot, recognized gain, deferred gain, and replacement-property basis for a modeled like-kind exchange. It is an educational estimate, not a determination that a transaction qualifies for Section 1031 treatment.

Inputs

Enter the relinquished property's sale price, selling expenses, adjusted basis, and debt, followed by the replacement property's price and debt. The calculator validates that expenses and debt do not exceed the corresponding property value.

Calculation method

$\text{Net sales price}=\text{Relinquished price}-\text{Selling expenses}$ $\text{Realized gain}=\max(0,\text{Net sales price}-\text{Adjusted basis})$ $\text{Cash boot}=\max(0,\text{Relinquished equity}-\text{Replacement equity})$ $\text{Recognized gain}=\min(\text{Realized gain},\text{Total boot})$ $\text{Deferred gain}=\max(0,\text{Realized gain}-\text{Recognized gain})$ $\text{New basis}=\text{Replacement price}-\text{Deferred gain}$

Mortgage boot is modeled separately when replacement debt is lower and additional cash does not offset the debt reduction.

Worked example

Suppose a relinquished property sells for $500,000 after$20,000 expenses, has a $300,000 adjusted basis and$250,000 debt, and the replacement property costs $550,000 with$300,000 debt.

1. Net sales price: $500,000 - $20,000 = $480,000.
2. Realized gain: $480,000 - $300,000 = $180,000.
3. Relinquished equity: $480,000 - $250,000 = $230,000.
4. Replacement equity: $550,000 - $300,000 = $250,000.
5. The model compares those equities to estimate boot and the portion of gain recognized.

Questions

Does a result prove the exchange qualifies?

No. Qualification depends on property use, identification and timing rules, related-party rules, exchange structure, and other facts outside these inputs.

What is boot?

Boot is modeled non-like-kind value received or debt relief that can create recognized gain. This calculator separates cash boot and mortgage boot under its simplified assumptions.

Why can the replacement basis be lower than the purchase price?

Deferred gain reduces the modeled basis. The result is a planning value, not a substitute for the basis statement prepared for a real transaction.

Limitations

The calculator does not model every IRS rule, depreciation recapture, qualified intermediary process, deadlines, related parties, state tax, or legal interpretation. Consult current IRS guidance and a qualified tax professional.