1031 Exchange Replacement Calculator
Getting your replacement property numbers right is the difference between a fully tax-deferred exchange and an unexpected tax bill.
Enter the details of the property you're selling, and we'll show you the minimum purchase price, the equity you'll need to reinvest, and the debt you should replace to keep 100% of your gain working for you.
How much should you buy?
Enter the figures from the property you're relinquishing.
Your Replacement Targets
Minimums to fully defer your taxes.
Figures are estimates. Your exact requirements depend on your basis, depreciation, and transaction costs — always confirm with a qualified tax advisor.
What this calculator is telling you
A 1031 exchange lets you roll the full proceeds of an investment property sale into a new one without triggering capital gains or depreciation recapture taxes. To pull that off, the IRS expects you to reinvest everything you walked away with and to buy something worth at least as much as what you sold. This tool translates that rule into three plain numbers.
New Property Value is the floor on what you should pay for your next property — your sale price minus the costs of closing. Buy below this line and the shortfall becomes taxable “boot.” Cash Down is the net equity coming out of your sale (what's left after closing costs and paying off your loan), and all of it needs to be reinvested through your qualified intermediary. New Debt is the financing you'll want to carry so the purchase reaches the required value. The two always add up: Cash Down plus New Debt equals your New Property Value.
What qualifies as a replacement property
Not every property is fair game for an exchange. Three tests decide whether a property qualifies.
It has to be “like-kind”
This phrase trips up a lot of investors, but the bar is broader than it sounds. Almost any real estate held for investment is considered like-kind to almost any other — raw land can be swapped for an apartment building, a single rental for a portfolio, or a property you manage yourself for a passive interest in a Delaware Statutory Trust (DST). The asset type and quality can change; what matters is that both properties are real estate held for the right reason.
It has to be held for business or investment
The property you sell and the one you buy both need to be used to produce income or held as an investment. A home you live in or a property you bought to fix and flip won't qualify, because neither is held for investment in the eyes of the IRS.
You generally need to trade equal or up
To defer the entire gain, your replacement property should be worth at least as much as the one you sold, you should reinvest all of your equity, and you should replace any debt that was paid off at closing — either with new financing or with additional cash. Come in below any of those marks and the difference is treated as boot, which is the portion of the transaction the IRS will tax.
Three ways investors structure the trade
The same sale can be reinvested in very different ways depending on your goals. Here are three common approaches, each fully compliant with the rules above.
Put more of your own cash in
Suppose you sell a rental for $600,000 with $250,000 still owed on the mortgage, leaving you $350,000 in equity. You find a replacement worth $750,000. You can roll in your full $350,000 and add $50,000 of your own funds for a $400,000 down payment, financing the remaining $350,000. You've cleared the value, equity, and debt requirements, so the entire gain stays deferred.
Use leverage to trade up
Plenty of investors exchange specifically to scale into a larger, higher-income asset. Say you sell for $600,000 with only $100,000 of debt, freeing up $500,000 in equity. You set your sights on a $1.2 million property. By reinvesting the $500,000 and taking on an $700,000 loan, you more than satisfy the requirements while roughly doubling the size of your holding — and your cash flow potential along with it.
Take some cash out with a partial exchange
An exchange doesn't have to be all or nothing. If you need liquidity, you can pull some money out and defer the rest. Sell for $600,000 with a $250,000 loan, then buy a $500,000 replacement carrying a $250,000 mortgage. You've reinvested $250,000 of your $350,000 in equity and kept $100,000 in your pocket. That $100,000 is taxable boot — but the remaining gain rolls forward untaxed.
Why investors exchange with Exchange-X
Exchange-X is a leading 1031 exchange platform built around Delaware Statutory Trust (DST) properties, with direct access to more than 70 of the country's top sponsors and dozens of active offerings at any given time. Backed by over $1 billion in transaction volume and more than two decades of experience, our advisors help you pinpoint replacement properties that fit your numbers and close on time — comfortably inside your 45-day identification and 180-day closing windows.
See properties that match your numbers
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Join Exchange-XThis calculator and the information above are provided for general educational purposes only and do not constitute tax, legal, or investment advice. Your actual replacement requirements depend on factors unique to your situation, including adjusted basis, depreciation recapture, debt payoff, and transaction costs. Always consult a qualified tax professional and your qualified intermediary before acting on a 1031 exchange. Securities offered through Metric Financial, Member FINRA/SIPC. © Exchange-X. All rights reserved.