1031 Exchange Boot Liability Estimator

Quantify the cash boot, mortgage boot, and net equity you must roll into a replacement property to keep a 1031 exchange fully tax-deferred. Enter your sale price, basis, new debt, and optional exchange costs to reveal exposed gain, reinvestment needs, and the minimum replacement value required at your planned leverage level.

Contract price you expect to receive for the relinquished property before paying off debt or closing costs.
Tax basis after depreciation recapture and capital improvements for the relinquished property.
Purchase price of the replacement property you intend to acquire through the exchange.
Loan balance you expect to place on the replacement property at closing (new or assumed debt).
Optional — defaults to $0.00 when blank. Enter the payoff on existing debt tied to the relinquished property.
Optional — defaults to $0.00 when blank. Include exchange fees, commissions, and closing costs paid from proceeds.

For educational planning only. Consult with a qualified intermediary and tax advisor before executing a 1031 exchange.

Examples

  • Example 1 — $900,000.00 sale, $400,000.00 basis, $950,000.00 replacement, $500,000.00 new debt, $400,000.00 old debt, $15,000.00 exchange expenses ⇒ Taxable boot: $35,000.00 | Cash boot: $35,000.00 | Mortgage boot: $0.00 | Net equity to reinvest: $485,000.00 | Replacement value needed at current debt: $985,000.00 | Debt needed to match prior balance: $400,000.00
  • Example 2 — $1,200,000.00 sale, $650,000.00 basis, $1,250,000.00 replacement, $600,000.00 new debt, $525,000.00 old debt ⇒ Taxable boot: $0.00 | Cash boot: $0.00 | Mortgage boot: $0.00 | Net equity to reinvest: $675,000.00 | Replacement value needed at current debt: $1,275,000.00 | Debt needed to match prior balance: $525,000.00

FAQ

How do I account for qualified exchange expenses?

Enter them in the optional qualified exchange expenses field so the calculator automatically reduces both net equity and realized gain.

What if my realized gain is lower than the boot total?

The calculator caps taxable boot at the realized gain. Any excess boot still decreases the basis you carry into the replacement property but does not create additional current income tax.

Can I model reverse or improvement exchanges?

Yes. Enter the value of the property you ultimately intend to park or improve so the tool highlights equity and debt gaps you must bridge with interim financing.

Does paying down extra debt at closing increase boot?

Voluntary payoff beyond the optional debt input lowers net equity. Include all scheduled debt reductions so the cash-boot figure mirrors your settlement statement.

Additional Information

  • Taxable boot equals the lesser of total boot and realized gain, so exposure never exceeds your gain after subtracting qualified exchange expenses.
  • Cash boot is triggered when net equity from the relinquished property exceeds the equity you roll into the replacement deal.
  • Mortgage boot surfaces when debt paid off in the relinquished sale is not replaced with equal or greater debt on the new property.
  • Minimum replacement value at your current leverage equals replacement debt plus the net equity result.
  • Net equity calculation subtracts both relinquished debt payoff and optional exchange expenses so the figure mirrors the cash available for reinvestment.

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