RESOURCES - CALCULATORS
Deadline Calculator
Depreciation Calculator
Capital Gains Calculator
DAY 1
Closing date
on property
being sold
(relinquished property)
DAY 2-44
Identification Period:
Exchange researches
properties to acquire
as replacement
properties
DAY 45
Deadline to identify
candidate replacement
properties
DAY 46-179
Exchanger pursues
acquisition of
candidate
replacement
properties
DAY 180
Deadline to close on
the acquisition of one
or more of the
identified candidate
properties
If you're considering a 1031exchange, it's important to be aware of the two distinct deadlines that drive the exchange process: the 45-day identification period and the 180-day exchange period.
Closing date on property being sold:
Month
Day
Year
Identification Period (45 days) ends:
Exchange Period (180 days) ends
The above identification and closing deadlines are estimates and do not take into consideration a taxpayer’s potential tax filing date restriction. It's important to note that this calculator provides an approximate estimate, and you should always consult with a qualified intermediary and tax professional for guidance specific to your situation.
Depreciation is an essential aspect of real estate investing, as it helps you lower your taxable income by accounting for the gradual reduction in value of your property over time. To receive a personalized estimate, simply fill out the fields below with the appropriate information:
Type of property
Years Property Has Been Owned
(Years - Months)
Years
Months
Original Purchase Price of Property
(cost basis) ($)
Land Value ($)
Improvement to Property ($)
Annual Depreciation ($)
Total Accumulated Depreciation ($)
Please note that the IRS requires residential real estate to be depreciated over a 27.5 year period, and commercial real estate to be depreciated over a 39 year period.
It's important to keep track of your property's accumulated depreciation, as this will affect your tax liability if and when you decide to sell the property. If you sell a property for more than its depreciated value, you may be subject to depreciation recapture tax.
In addition to depreciation, you may also be interested in using a 1031exchange to defer capital gains tax when you sell your property. Be sure to check out our Capital Gains Calculator to see how this strategy could benefit you.
THIS CALCULATOR IS FOR INFORMATIONAL PURPOSES ONLY. Please consult your Tax Advisor for an accurate calculation based upon your specific situation.
It's crucial to recognize the diverse factors that can impact the calculation of real estate capital gains. Strategies such as 1031 exchanges often play a significant role in minimizing your capital gains and the related tax liabilities. For a tailored estimate, please input your specific values.
Original Price of Property (cost basis) ($)
Improvements to Property ($)
Selling Expenses ($)
Sale Price of Property ($)
Total Capital Gain ($)
Accumulated Depreciation (Use the Depreciation Calculator)
Tax Calculation
Federal Capital Gains Tax*
%
Depreciation Recapture
%
State Capital Gains**
%
Net Investment Income Tax***
%
Total Tax Liability
Benefit of Exchanging vs Selling ($) (additional equity available to reinvest through a 1031 exchange)
*Federal Capital Gains Tax is between 15-20% depending upon annual household income.
**State Capital Gains Tax varies by state and income level, 13% is just an estimate used as the default above.
*** Net Investment Income Tax of 3.8% is applied if annual investment income is $200,000+ for a single taxpayer or $250,000+ for married taxpayers filing jointly.
Here's an overview of how real estate capital gains are typically calculated:
Determine the property's cost basis: The cost basis of the property includes the original purchase price, plus any transaction fees, commissions, and other expenses incurred during the purchase process. It can also include improvements made to the property over time, such as renovations or additions, but not routine repairs and maintenance.
Adjust the cost basis: The cost basis of the property may need to be adjusted for factors such as depreciation, casualty losses, or energy efficiency improvements. For example, if the property has been depreciated over time, the adjusted cost basis would be the original cost basis minus the accumulated depreciation.
Determine the sale price: The sale price is the amount the property is sold for, minus any transaction fees and commissions.
Calculate the gain: The gain is the difference between the sale price and the adjusted cost basis of the property.
Determine the tax rate: The tax rate on the gain depends on several factors, including how long the property was held and the taxpayer's income level. If the property was held for less than one year, the gain is subject to short-term capital gains tax, which is taxed at the taxpayer's ordinary income tax rate. If the property was held for more than one year, the gain is subject to long-term capital gains tax, which is typically taxed at a lower rate.
Calculate the tax liability: The tax liability is the amount of tax owed on the gain. This can be calculated by multiplying the gain by the applicable tax rate.
THIS CALCULATOR IS FOR INFORMATIONAL PURPOSES ONLY. Please consult your Tax Advisor for an accurate calculation based upon your specific situation.
CONSIDERING A 1031 EXCHANGE?
At 1031Portfolio, we offer our valued clients exclusive access to top-performing investment opportunities. We understand the importance of making informed investment decisions, and we are committed to helping you navigate the complex world of 1031 exchanges with ease. Our in-house brokerage expertise allows us to provide you with the highest level of service and support, ensuring that your investment goals are met.
We encourage you to contact us prior to taking any steps regarding your exchange, as our extensive network of resources, including qualified intermediaries, enables us to provide you with the most up-to-date and reliable information available. Partner with us at 1031Portfolio and let us help you achieve your investment objectives.
“Unlock Passive Income Opportunities and Streamline Your 1031 Exchange with 1031Portfolio”