See how a 1031 exchange splits your depreciation into two schedules
After a 1031 exchange, your replacement property's depreciation doesn't start fresh. The IRS requires the depreciable basis to be split into two components: the "exchanged basis" (carryover from your old property) and the "excess basis" (new investment). Each follows its own depreciation schedule. Use this calculator to see the combined impact and compare it to what you'd get with an outright purchase.
The property you sold in the exchange
Purchase price must be greater than $0
Date property was placed in service
Total depreciation claimed on this property to date
Sale price is required to calculate deferred gain
The property you acquired in the exchange
Purchase price must be greater than $0
Date the replacement property was acquired
New cash invested beyond exchange proceeds (boot paid in)
Enter Your Property Details
Fill in the relinquished and replacement property information above to see how your depreciation splits after the exchange.
One of the most misunderstood aspects of a 1031 exchange is what happens to your depreciation deductions. Many investors assume they get a fresh depreciation start on the full value of their replacement property. They don't.
The IRS requires the replacement property's depreciable basis to be split into two components, each with its own depreciation schedule. This means your annual deduction after an exchange is typically different from what you'd get buying the same property outright.
Our network of tax professionals can help you understand your post-exchange depreciation picture