1031 Exchange Timeline & Capital Gains Calculator
A 1031 like-kind exchange is one of the most powerful wealth-building tools in the tax code, letting real estate investors sell an appreciated property and roll the entire proceeds into a new one while deferring every dollar of capital gains and depreciation-recapture tax. But the strategy is governed by two unforgiving deadlines: you have 45 calendar days from closing to formally identify replacement properties, and 180 days to close on one. Miss either and the exchange collapses, triggering the full tax bill. This calculator does double duty. It computes your adjusted cost basis, total realized gain, and the estimated tax you stand to defer — separating depreciation recapture, taxed at up to 25 percent, from long-term capital gains. It also stamps out your exact 45-day identification and 180-day exchange deadlines from your closing date so nothing slips.
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Results update live as you type. Estimates only — not financial, tax, or investment advice.
The Formula
Adjusted Basis = Cost + Improvements − Depreciation; Deferred Tax = Recapture + Capital Gains Tax
Understanding the 1031 Exchange Timeline & Capital Gains Calculator
A 1031 exchange lets you sell an appreciated investment property and reinvest the full proceeds into a replacement 'like-kind' property while deferring the capital gains and depreciation-recapture tax you would otherwise owe. Done repeatedly, it lets investors compound their entire pre-tax equity across a lifetime of ever-larger properties — the phrase is 'swap till you drop,' because heirs can inherit at a stepped-up basis. But the deferral is governed by two strict, non-extendable deadlines measured from the day your sale closes.
You have exactly 45 calendar days to formally identify your replacement property in writing (subject to rules like the three-property or 200% rules), and 180 days total to close on the purchase. Miss either window and the entire exchange fails, triggering the full tax bill. You also cannot touch the sale proceeds — a Qualified Intermediary must hold them between transactions. Any cash or debt relief you fail to reinvest, known as 'boot,' becomes taxable. This calculator projects both your deferred tax and your two hard deadlines so nothing slips.
Frequently Asked Questions
What are the 45-day and 180-day rules in a 1031 exchange?
From the day your relinquished property sells, you have 45 calendar days to identify replacement properties in writing and 180 calendar days to close on the purchase. Both clocks start on the same closing date and run concurrently. These deadlines are strict — there are no extensions for weekends, holidays, or financing delays.
What is 'boot' in a 1031 exchange?
Boot is any value you receive that is not reinvested into the replacement property — typically leftover cash or a reduction in your mortgage debt. Boot is taxable even within an otherwise valid exchange. To fully defer taxes, you must reinvest all proceeds and acquire property of equal or greater value and debt.
Do I need a Qualified Intermediary for a 1031 exchange?
Yes. IRS rules prohibit you from taking possession of the sale proceeds. A Qualified Intermediary (also called an accommodator) holds the funds between the sale and purchase and handles the exchange documentation. Taking control of the money yourself, even briefly, disqualifies the exchange and triggers the tax.