1031 exchange boot calculator: how much of your exchange is taxable?
Took cash out, or replaced less debt than you paid off? Enter your sale and your replacement purchase. See the taxable boot and the 2026 tax on it.
By Hans Goldstein, EA, founder, Retirement Literacy Foundation · Updated
Admitted to practice before the IRS.
The property you sold
The property you bought
You
The example is a $2,000,000 sale replaced with a $1,600,000 purchase. Change any number and the result updates. 2026 rules.
| Where the boot comes from | |
| Net proceeds from the sale | |
| Cash boot: proceeds not reinvested | |
| Mortgage boot: debt relief not replaced | |
| Total boot received | |
| What gets taxed | |
| Realized gain on the sale | |
| Recognized gain: lesser of gain or boot §1031(b) | |
| Depreciation recapture (up to 25%) taxed first | |
| Federal capital gains | |
| Net investment income tax @ 3.8% | |
| State income tax | |
| Tax due this year | |
| Gain still deferred into the new property | |
2026 rates. Under §1031(b) you recognize gain equal to the lesser of your realized gain or the boot received; recapture is taxed at your ordinary rate capped at 25% under §1(h)(1)(E), and the rest at 0/15/20% by the §1(h)(1) worksheet, then the 3.8% net investment income tax above $200,000 single / $250,000 married of modified AGI (estimated here as your other taxable income plus the 2026 standard deduction, $16,100 single / $32,200 married, plus the recognized gain). Brackets: IRS Rev. Proc. 2025-32. If the new purchase needs more cash than the exchange proceeds provide, the calculator counts that gap as cash you added. Cash you add to the purchase offsets mortgage boot, but cash you take out is never offset by taking on more debt. Your basis in the replacement property carries over, adjusted for boot and recognized gain. This is education from a 501(c)(3), not tax advice. A qualified intermediary and your CPA have to sign off on the actual exchange.
The deadlines that decide this
Boot is usually not a mistake in the math. It is a mistake in the calendar. The one-page sheet below (no email needed) covers the 45-day and 180-day rules, what counts as like-kind, why debt replacement trips up most sellers, and what your options still are if the exchange is already closed.
- 45 days to identify replacement property, in writing, from the day you close. No extensions, ever.
- 180 days to close on it, or your tax return due date, whichever comes first.
- Debt must be replaced too. Trading $700k of mortgage for $500k creates $200k of boot even if every dollar of cash was reinvested.
Read the one-page deadlines sheet (PDF)
Free from a 501(c)(3). Nothing is sold.
People also ask
What is a partial 1031 exchange?
It is an exchange where you reinvest only part of the proceeds or take on less debt than you paid off. The part not reinvested is boot. The exchange still defers gain on the reinvested part, and you pay tax this year on gain up to the amount of boot.
How is mortgage boot calculated?
Compare the debt paid off on the property you sold with the debt on the property you bought. If the new loan is smaller, the difference is mortgage boot, unless you offset it by adding your own cash to the purchase. Cash boot received cannot be offset by taking on more debt.
Is boot taxed as capital gain?
Recognized gain from boot keeps the character of the gain on the property sold. The part tied to depreciation you took can be taxed at up to 25% federally as unrecaptured section 1250 gain, and the rest at 0%, 15% or 20%, plus the 3.8% NIIT and state tax where they apply.
Related
- Capital gains tax calculator
- Will a sale trigger IRMAA?
- A sale and Social Security tax
- California retirement taxes
Sources: IRS Form 8824; IRS Publication 544; 26 U.S.C. §1031. Checked October 10, 2026.
