Skip to main content

1031 Exchange Calculator

See exactly how much you'd lose by selling an investment property instead of deferring through a 1031 exchange. The math is eye-opening.

Takes about 3-5 minutes

Property Details

1 of 3

Tell us about the property you're considering selling.

$

The gross price you would sell the property for.

$

What you originally paid for the property (cost basis).

10 years
1 years 40 years

How long you've held the property. Affects depreciation recapture.

7%
0% 12%

Total costs to sell: commissions, closing costs, fees. Industry standard: ~7%.

Important: This calculator provides estimates for educational and illustrative purposes only. Tax laws are complex and individual circumstances vary significantly. Results should not be considered tax advice.

Calculations use 2025 federal tax brackets and current state top marginal rates. Actual taxes may differ based on deductions, exemptions, AMT exposure, filing details, and other factors not modeled here.

Always consult with a qualified CPA, tax attorney, or financial advisor before making decisions about property sales or 1031 exchanges.

Turn the Numbers Into a Plan

Send a Raven and we'll walk through your results together. Free, no obligation.

Send a Raven

Frequently Asked Questions

Common questions about 1031 exchanges and this calculator.

A 1031 exchange (named after Section 1031 of the Internal Revenue Code) lets you sell an investment property and defer all capital gains taxes by reinvesting the proceeds into a 'like-kind' replacement property. The deferred tax stays invested and keeps compounding on your side instead of going to the IRS.
You have 45 days from closing to identify potential replacement properties and 180 days to close on one. A qualified intermediary, a neutral third party who holds your sale proceeds, must handle the money. You can never take possession of the cash. Missing either deadline disqualifies the exchange entirely.
When you sell a depreciated rental property, the IRS 'recaptures' the depreciation deductions you've taken. Under Section 1250, this gain is taxed at your ordinary income rate, capped at a maximum of 25%. If your ordinary bracket is lower than 25%, you pay the lower rate on that portion. A 1031 exchange defers this tax along with your capital gains tax.
The NIIT is a 3.8% surtax on investment income for individuals with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly). It applies on top of regular capital gains tax and is deferred through a 1031 exchange.
No. States like Florida, Texas, Nevada, Wyoming, South Dakota, Tennessee, and Alaska have no state income tax on capital gains. Washington has a special 7% tax on gains exceeding $278,000, with a 9.9% rate on gains over $1 million. California has the highest rate at 13.3%. Your state tax impact can vary enormously.
This calculator uses 2025 federal tax brackets and current state tax rates to provide a defensible estimate. It models how your capital gains stack on top of your other income (which determines the rate each dollar is taxed at), plus NIIT, Section 1250 depreciation recapture (capped at 25%), and state-specific rules for Washington and Massachusetts. However, individual tax situations vary. Always consult a CPA or tax attorney before making decisions.
Because the tax hit reduces your starting equity, and you can never recover the compounding on that lost capital. Even at the same appreciation rate, the 1031 path starts with more equity and compounds on a larger base every year. The tax bill is paid once, but the lost compounding repeats every year after. That is why the gap keeps widening.
Share them with your financial advisor, CPA, or real estate attorney. These numbers illustrate the true long-term cost of selling vs. exchanging. If the tax hit and recovery timeline are significant, a 1031 exchange is worth serious consideration. Skane Strategies can help connect you with qualified intermediaries and exchange specialists.