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Section 1031 Exchange Boot, Recognized Gain and Basis Calculator

What do these figures come to once the work is shown?

Realized gain, boot from cash and net debt relief, recognized gain, deferred gain and the basis of the replacement real property.

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  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Recognized gain
$100,000
Taxed now: the lesser of realized gain and boot
Realized gain
$700,000
Boot received
$100,000
Cash plus net debt relief
Drawn to one scale
Recognized gain$100,000
Realized gain$700,000
Boot received$100,000
Deferred gain$600,000
Basis of replacement property$400,000
All results
MeasureResult
Recognized gain$100,000
Realized gain$700,000
Boot received
Cash plus net debt relief
$100,000
Deferred gain
Negative means a deferred loss, which stays in the basis
$600,000
Basis of replacement property
FMV of the new property less the deferred gain
$400,000
How this was worked out
Work shownrecomputed as you type
Boot = cash and other property received + max(0, liabilities relieved - liabilities assumed)
Realized gain = FMV received + cash + liabilities relieved - liabilities assumed - adjusted basis given up
Recognized gain = min(realized gain, boot), if realized gain is positive
Replacement basis = FMV of replacement - deferred gain (realized - recognized)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Boot = cash and other property received + max(0, liabilities relieved - liabilities assumed)
  • Realized gain = FMV received + cash + liabilities relieved - liabilities assumed - adjusted basis given up
  • Recognized gain = min(realized gain, boot), if realized gain is positive
  • Replacement basis = FMV of replacement - deferred gain (realized - recognized)

How it works

Section 1031 defers gain on an exchange of real property held for business or investment for like-kind real property. If you also receive money or other property, gain is recognized up to the amount of that boot. Since 2018 the rule covers real property only. Liabilities you are relieved of count as money received, and liabilities you assume offset them.

The basis of the replacement property equals the basis of the property given up, reduced by money received and increased by gain recognized, with the debt adjustments. The result here is the same as fair market value minus the deferred gain. Cash you pay in the exchange, which offsets liabilities you are relieved of, is not an input, and excess liabilities you assume do not offset cash received (Treas. Reg. 1.1031(d)-2). The 45-day identification and 180-day exchange deadlines are not tested. Section 1031 does not recognize loss either, so this tool shows no recognized gain when realized gain is negative.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What are the exchange deadlines?

You identify replacement property within 45 days of the transfer and receive it by 180 days after, or the due date of your return for the year of transfer, including extensions, if that is earlier.

Is personal property eligible?

Not after 2017. Only real property qualifies.

How is boot taxed?

Gain is recognized up to the boot received. Its character is outside this tool.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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