1031 Exchange Savings
How much capital gains tax you defer by rolling proceeds into a like-kind investment property.
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How a 1031 exchange defers your capital gains
A Section 1031 'like-kind' exchange lets you sell an investment property and reinvest the proceeds into another, deferring the capital-gains and depreciation-recapture tax you would otherwise owe on the sale. The tax is not erased — it is deferred, potentially indefinitely, as you roll from property to property.
This calculator compares the tax on a straight sale against a 1031 exchange, using your sale price, adjusted basis, and state, so you can see the size of the deferral before you commit to the timeline.
Frequently asked
- Does a 1031 eliminate the tax or just defer it?
- It defers it. You carry the deferred gain into the replacement property's basis. Many investors keep deferring across exchanges; heirs may receive a stepped-up basis, but that is a planning question for your CPA.
- What are the deadlines?
- Strict ones: you have 45 days from the sale to identify replacement property and 180 days to close. Miss either and the exchange fails and the gain becomes taxable.
- What qualifies as like-kind?
- For real estate, most investment or business property is like-kind to other investment real estate. Personal residences and property held mainly for resale do not qualify.