Debt Replacement Calculator
Estimate how replacement-property equity and leverage compare with the value of the relinquished property when planning for full tax deferral in a 1031 exchange.
Relinquished Property
Enter the sale and debt information for the property being exchanged.
As a general rule of thumb, full deferral requires reinvesting all net equity and replacing debt or adding fresh cash.
Replacement Properties
Enter the equity invested and leverage for each replacement property or passive real estate interest.
Your total Exchange Funds Invested are less than the Exchange Funds to Qualified Intermediary. The unreinvested amount may be subject to taxable boot.
Your combined replacement property purchase value is less than the Reinvestment Requirement for Full Deferral. The shortfall may be subject to taxable boot.
Exchange Summary
See how your replacement equity and debt compare with the reinvestment requirement.
This simplified estimate uses the greater of (1) unreinvested exchange funds or (2) the replacement-property value shortfall.
This calculator is provided for general informational purposes only and is not legal, tax, investment, or accounting advice. The debt-replacement concept is often used as a planning rule of thumb, but actual taxable boot and eligibility for full tax deferral depend on the complete facts of the exchange, including debt relief, cash received or contributed, liabilities assumed, replacement-property value, transaction expenses, and other tax rules. Consult your tax and legal advisors regarding your specific transaction.
