1031 Exchange Savings Calculator : Find How Much Gains You Can Defer
This 1031 Exchange calculator below is based to estimate the total capital gains tax that you can defer using the provision of law under section 1031 of the Internal Revenue Code.If the investor does not move forward with an exchange, then the transfer of 1031 exchange property is a sale subject to taxation.
IRC Section 1031 (a)(1) lays down the rules of 1031 exchange as under :
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment, if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
An investor that holds property longer than 1 year will be taxed at the favorable capital gains tax rate. Otherwise, the sales gain is taxed at the ordinary income rate.The 1031 Exchange calculator will help you to determine the tax deferment you can do legally by performing a like-kind exchange of real estate.