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1031 Exchange Calculator

We’ll be happy to help you with calculating your 1031 Exchange, please give us a call 215-489-3800.

Enter the following information and our calculator will provide you an idea of how a 1031 exchange will work in your situation. Note that you can see all of the calculations so you can better understand how the final figures were calculated. In no way should the completion of this worksheet be construed as tax advice or used in place of competent tax advice. Always consult a tax advisor to determine exactly how an exchange will work in your particular situation.
		Original purchase price of relinquished property
		All capital improvements made to the relinquished property
		All depreciation taken on the property thru the end of last year
		All prior deferred gain rolled into the relinquished property
		Current selling price of the relinquished property
		Mortgages/Equity Lines to be paid off on relinquished property
		All closing costs for relinquished property (commissions, 1031 fee, etc.)
		Purchase price of replacement property
		All closing costs associated with acquisition of replacement property
		New mortgages on replacement property
		Appropriate state tax rate

✴NET SELLING PRICE:
		Current selling price of relinquished property
	less	All closing costs on the sale of relinquished property
	equal	NET SELLING PRICE

✴ADJUSTED TAX BASIS OF RELINQUISHED PROPERTY:
		Original purchase price of relinquished property
	plus	All capital improvements made to the relinquished property
	less	All depreciation taken on the property thru the end of last year
	less	All prior deferred gain rolled into the relinquished property
	equal	ADJUSTED TAX BASIS

✴REALIZED GAIN:
		Net selling price
	less	Adjusted tax basis
	equal	REALIZED GAIN (This is your actual gain on the sale.)

✴RECOGNIZED GAIN:
		Net selling price
	less	Purchase price of replacement property
	plus	All closing costs associated with acquisition of replacement property
	equal	RECOGNIZED (TAXABLE) GAIN [Show 0 if negative number]

✴DEFERRED GAIN
		Realized gain
	less	Recognized gain
	equal	DEFERRED GAIN [Show 0 if negative number.] (This is the gain deferred through the 1031 exchange.)
✴FEDERAL CAPITAL GAINS TAX THAT WOULD BE DUE WITHOUT AN EXCHANGE:
		Depreciation taken on property
	multiply by	Multiply by the recapture tax rate of 25%
	total	DEPRECIATION GAIN TAX LIABILITY

		Net Selling Price of Relinquished Property
	less	Original purchase price of property
	plus	Closing costs
	total	Appreciation Gain
	multiply by	Multiply by a capital tax rate of 15% (assuming you are an individual taxpayer who held property at least 12 months). We are using 15% to estimate the capital gain tax. For those with taxable income over $400,000 ($450,000 if married), the rate may be as high as 20%. You may also be subject to the 3.8% Medicare Tax. Your tax advisor can help you determine your actual tax rate.
	total	CAPITAL GAINS TAX LIABILITY

		Depreciation Gain Tax Liability
	plus	Capital Gain Tax Liability
	equal	ESTIMATED FEDERAL TAX DUE WITHOUT AN EXCHANGE

✴STATE CAPITAL GAINS / INCOME TAX THAT WOULD BE DUE WITHOUT AN EXCHANGE*:
		Net Selling Price of Relinquished Property
	less	Adjusted Tax Basis of relinquished property
	total	Gain
	multiply by	Multiply by the appropriate state tax rate. Note each state is different. Some states recognize 1031 exchange and you can defer the state gain also. However, some states including Pennsylvania, do NOT and state gain will be due regardless of whether or not you complete a 1031.
	equal	ESTIMATED STATE CAPITAL GAINS / INCOME TAX LIABILITY

✴ADJUSTED TAX BASIS OF REPLACEMENT PROPERTY:
		Purchase price of replacement property
	plus	Closing Costs
	less	Deferred gain
	equal	ADJUSTED TAX BASIS OF REPLACEMENT PROPERTY

✴EQUITY COMPUTATIONS:
		Net selling price of relinquished property
	less	Mortgages/Equity Lines to be paid off on relinquished property
	equal	EQUITY IN RELINQUISHED PROPERTY

		Purchase price of replacement property plus closing costs
	less	New mortgages on replacement property
	equal	EQUITY IN REPLACEMENT PROPERTY

		Equity in the replacement property
	less	Equity in the relinquished property
	equal	The equity in the replacement property must be equal or greater than the equity in the relinquished property or you will be taxed on the value of the trade down (dollar for dollar).