1031 Exchange Calculator
Compare selling and paying taxes vs. deferring with a §1031 exchange.
Estimate only — for illustrative purposes; does not constitute financial, tax or legal advice. Always consult with a CPA/tax advisor.
Property & Sale
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Net Sales Proceeds is the gross sales price minus closing costs (real estate commission, title insurance, transfer taxes, escrow, attorney fees, recording, etc.).
As a rule of thumb, total seller closing costs typically run 6–8% of the gross sales price for most investment real estate. High-transfer-tax markets (NYC, CA cities, Chicago, DC, NJ, Phila., Pittsburgh) can push this to 8–10%+. Larger institutional deals ($25M+) trend lower at 2–4%.
Note: high-value sales in CT, NY, NYC, and NJ may also trigger a separate Mansion Tax (NY/NYC/NJ: 1% over $1M, with NYC tiered up to 3.9%; CT: 2.25% over $2.5M). Mansion taxes are typically residential-only — verify whether your investment property qualifies.
As a rule of thumb, total seller closing costs typically run 6–8% of the gross sales price for most investment real estate. High-transfer-tax markets (NYC, CA cities, Chicago, DC, NJ, Phila., Pittsburgh) can push this to 8–10%+. Larger institutional deals ($25M+) trend lower at 2–4%.
Note: high-value sales in CT, NY, NYC, and NJ may also trigger a separate Mansion Tax (NY/NYC/NJ: 1% over $1M, with NYC tiered up to 3.9%; CT: 2.25% over $2.5M). Mansion taxes are typically residential-only — verify whether your investment property qualifies.
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Capital Improvements are the running total of all expenditures you've capitalized over the hold period. You can enter an estimate here, but refer to your CPA's depreciation schedule for the exact amount.
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Placed in Service is the date the property became ready and available for its intended use — for rental real estate, when it was available to rent. Depreciation begins from this date.
For most investors it matches the purchase date, but it can come later — for example, if renovations delayed the property from being rent-ready, or if the owner lived in the property for several years before converting it to a rental (the placed-in-service date would be the conversion date, not the original purchase).
Estimated Accumulated Depreciation
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Assumes ~85% of (purchase + improvements) is depreciable building basis, straight-line MACRS.
Excludes cost segregation and bonus depreciation.
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Suspended passive losses are losses from passive activities (typically rental real estate) that exceeded your passive income in prior years and couldn't be deducted then. Under IRC §469 they carry forward until you have passive income to absorb them — or you fully dispose of the property.
On a fully taxable sale, suspended losses release and offset the LTCG portion of the gain. Depreciation recapture (taxed at up to 25% under IRC §1(h)(1)(D)) is not reduced by PAL. In a §1031 the sale isn't fully taxable, so the losses stay suspended and carry over to the replacement property — they only reduce the "Sell & Pay Tax" scenario below.
On a fully taxable sale, suspended losses release and offset the LTCG portion of the gain. Depreciation recapture (taxed at up to 25% under IRC §1(h)(1)(D)) is not reduced by PAL. In a §1031 the sale isn't fully taxable, so the losses stay suspended and carry over to the replacement property — they only reduce the "Sell & Pay Tax" scenario below.
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Tax Profile
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Simple mode applies NIIT (3.8%) to the entire taxable gain
(after any suspended PAL is applied). Switch to Advanced for
the IRS rule that taxes only the portion of MAGI above $200k Single / $250k MFJ.
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LTCG rates are tiered by total taxable income, with breakpoints set by filing status (2026):
15% — taxable income up to $545,500 (Single) / $613,700 (MFJ)
20% — above those amounts
A 0% bracket exists for taxable income up to ~$49k Single / ~$99k MFJ, but real estate sellers virtually always exceed this threshold once the gain stacks on top of ordinary income — so Simple mode only offers 15% and 20%.
Use Advanced mode for the exact bracket-by-bracket calculation. Since your gain stacks on top of ordinary income, a single gain can span multiple brackets. Advanced mode captures the 0% bracket if it applies to you.
15% — taxable income up to $545,500 (Single) / $613,700 (MFJ)
20% — above those amounts
A 0% bracket exists for taxable income up to ~$49k Single / ~$99k MFJ, but real estate sellers virtually always exceed this threshold once the gain stacks on top of ordinary income — so Simple mode only offers 15% and 20%.
Use Advanced mode for the exact bracket-by-bracket calculation. Since your gain stacks on top of ordinary income, a single gain can span multiple brackets. Advanced mode captures the 0% bracket if it applies to you.
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For a reasonable estimate, enter your taxable income from your most recent return (Form 1040, line 15).
If you don't have your tax return handy or if your income will be materially different this year, taxable income ≈ all income (wages, business/rental income, interest, dividends, retirement distributions, etc.) minus the standard deduction (~$16,150 Single / ~$32,300 MFJ / ~$24,250 HoH for 2026) or itemized deductions. Add back any foreign income exclusions.
If you don't have your tax return handy or if your income will be materially different this year, taxable income ≈ all income (wages, business/rental income, interest, dividends, retirement distributions, etc.) minus the standard deduction (~$16,150 Single / ~$32,300 MFJ / ~$24,250 HoH for 2026) or itemized deductions. Add back any foreign income exclusions.
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Results
Tax Deferral via §1031 (Estimated)
$0
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Sell & Pay Tax
$0
Net cash after tax & debt (Estimated)
§1031 Exchange
$0
Equity to reinvest (Estimated)
Gain Calculation (Estimated)
Adjusted Cost Basis$0
Total Gain$0
Depreciation Recapture$0
Capital Gain Portion$0
Tax If You Sell (Estimated)
Federal — Recapture (25%)$0
Federal — LTCG$0
NIIT (3.8%)$0
State Tax$0
Total Tax (Estimated)$0
Net Proceeds
Sales Proceeds$0
Less Mortgage Payoff$0
Less Taxes$0
Sell & Pay — Net Cash (Estimated)$0
Effective tax rate & assumptions
Effective rate on gain0%
NIIT threshold used—
State rate used—
Questions?
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Estimate only. This calculator is for illustrative purposes and does not constitute financial, tax or legal advice.
Federal recapture rates, LTCG brackets, NIIT thresholds, and state rates change; always confirm with a qualified CPA
or tax advisor before relying on any §1031 strategy.
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