1031 Exchange Retirement Calculator
Compare selling your investment property outright vs. doing a 1031 exchange. See the tax deferral savings and long-term wealth impact for your retirement.
Current Property
Rental Income
Replacement Property (1031 Exchange)
1031 Exchange Benefit Score
A 1031 exchange is strongly beneficial for your situation.
Tax Deferred
$54,790
Wealth Advantage (20yr)
$572,824
Total Tax if Sold
$54,790
deferred via exchange
Net Proceeds if Sold
$415,210
after taxes & costs
Exchange Equity
$490,000
in replacement property
Wealth Advantage
46.57%
over 20 years
Tax Breakdown if Sold
Taxes you would owe on an outright sale
Total
$54,790
Capital Gains Tax
40%$21,750/yr
Depreciation Recapture
27%$15,000/yr
State Tax
19%$10,250/yr
Net Investment Income Tax
14%$7,790/yr
Wealth Comparison: Sell vs. Exchange
Projected total wealth over your holding period
Cumulative Income Comparison
Total rental income earned over the projection period
Year-by-Year Breakdown
Detailed comparison for each year
| Year | Exchange Wealth | Sell Wealth | Advantage | Exch. Income | Sell Income |
|---|---|---|---|---|---|
| 0 | $650,000 | $415,210 | +$234,790 | - | - |
| 5 | $877,762 | $601,342 | +$276,420 | $26,337 | $24,000 |
| 10 | $1,141,800 | $798,008 | +$343,793 | $30,532 | $24,000 |
| 15 | $1,447,893 | $1,006,884 | +$441,010 | $35,395 | $24,000 |
| 20 | $1,802,739 | $1,229,915 | +$572,824 | $41,032 | $24,000 |
Personalized Insights
Actionable recommendations based on your numbers
Defer $54,790 in taxes
A 1031 exchange lets you defer all capital gains and depreciation recapture taxes. That's $54,790 that stays invested and compounding instead of going to the IRS.
$572,824 more wealth with exchange
Over 20 years, the 1031 exchange path projects 46.57% more total wealth than selling and reinvesting the after-tax proceeds.
$15,000 depreciation recapture tax
You've claimed $60,000 in depreciation. If you sell outright, $15,000 is taxed at the 25% recapture rate — a 1031 exchange defers this entirely.
1031 exchange deadlines
You have 45 days from the sale to identify replacement properties and 180 days to close. A qualified intermediary must hold the funds — you can never take possession of the proceeds.
Potential step-up in basis at death
If you hold the exchanged property until death, your heirs receive a stepped-up basis — potentially eliminating all deferred capital gains taxes permanently. This is one of the most powerful estate planning benefits of 1031 exchanges.