Capital Gains Tax Deferral Calculator

See the financial impact of completing a 1031 exchange versus selling and paying taxes

Compare: Sell & Pay Taxes vs. 1031 Exchange

This comprehensive calculator demonstrates the complete tax impact including federal capital gains tax, state taxes, depreciation recapture, and Net Investment Income Tax (NIIT). See side-by-side comparisons and 10-year wealth projections showing compound growth benefits of tax deferral.

Property Details

Enter information about your property sale

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Gross sale price of your investment property

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Building value only (land is not depreciable)

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Major improvements that increased property value (not repairs)

How long you've owned this property

Affects depreciation calculation

Depreciation

Calculate or enter your accumulated depreciation

About Depreciation

Investment property can be depreciated over time. When you sell, this depreciation is "recaptured" and taxed at 25%. A 1031 exchange defers this tax as well.

Tax Information

Your filing status and state

Determines your capital gains tax rate

We'll calculate your state capital gains tax

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For Net Investment Income Tax calculation (3.8% if AGI exceeds threshold)

Net Investment Income Tax (NIIT)

The 3.8% NIIT applies if your Modified AGI exceeds: $200k (Single), $250k (Married Filing Jointly), $125k (Married Filing Separately). Leave blank for conservative estimate.

Ready to Calculate Your Tax Savings?

Enter your property details above to see your complete tax comparison and discover how much you can save with a 1031 exchange.

Understanding Your Tax Liability

Federal Capital Gains Tax

Long-term capital gains are taxed at 0%, 15%, or 20% depending on your income level. This is calculated on the difference between your sale price and adjusted cost basis.

Depreciation Recapture Tax

All depreciation claimed over the years is "recaptured" and taxed at 25% when you sell. This tax applies even if you didn't claim depreciation on your tax returns.

Net Investment Income Tax (NIIT)

An additional 3.8% tax on investment income for high-income earners. This applies to real estate gains if your modified adjusted gross income exceeds certain thresholds.

State Capital Gains Tax

Most states tax capital gains as ordinary income. Rates vary significantly by state, from 0% in states with no income tax to over 13% in high-tax states like California.

Benefits of 1031 Exchange Tax Deferral

  • ✓Preserve 100% of your equity to reinvest in replacement property
  • ✓Defer federal capital gains tax, depreciation recapture, and state taxes
  • ✓Continue building wealth through compound growth on tax-deferred dollars
  • ✓Repeat the process indefinitely to continue deferring taxes
  • ✓Potential step-up in basis for heirs eliminates deferred taxes permanently