1031 Capital Gain Tax Calculation


These calculations show the approximate capital gain taxes deferred by performing an IRC §1031 exchange with Asset Preservation, Inc. Please enter your figures in the fields provided (enter your numbers with no commas or dollar signs, for example: 300000) and click on the "Calculate" button in each area to perform the calculations.

1. CALCULATE NET ADJUSTED BASIS
Original Purchase Price
 $
plus Improvements
+ $
minus Depreciation
 – $
= NET ADJUSTED BASIS  = $
 
2. CALCULATE CAPITAL GAIN SALES PRICE OF PROPERTY
Sales Price $
minus Net Adjusted Basis – $
minus Costs of Sale (commissions, fees, etc.) – $
= CAPITAL GAIN  = $
 
3. CALCULATE CAPITAL GAIN TAX DUE
Recaptured Depreciation (25%) $
plus Applicable Federal Capital Gain Rate*
(select 15% or 20% or 28%**)
tax %
  + $
plus Applicable §1411 Medicare Surtax***
(select 0 or 3.8%)
tax %
  + $
plus State Capital Gain Rate
(enter your tax rate here)
tax % 
+ $
= TOTAL TAXES DUE = $
 
4. CALCULATE AFTER-TAX EQUITY
Sales Price $
minus costs of sale  $
minus loan balances – $
= GROSS EQUITY = $
minus Capital Gain Taxes Due – $
= AFTER-TAX EQUITY  = $
 
5. ANALYZE REINVESTMENT – SALE
AFTER-TAX EQUITY x 4  = $
 
6. ANALYZE REINVESTMENT – EXCHANGE
Capital Gain Taxes Due $
Gross Equity = Net Equity $
GROSS EQUITY x 4 = $
 

*The Federal capital gain tax rate is generally 15% or 20% depending upon taxable income. Single taxpayers with over $400,000 in taxable income and taxpayers filing as married filing jointly with over $450,000 in taxable income pay the higher 20% capital gain tax rate.

**Collectibles (art, antiques, coins, metal, gems and certain other tangible personal property) held one year or longer are taxed at 28%.

***The 3.8% Medicare surtax only applies to "net investment income" as defined in IRC §1411.

Single Taxpayer
Married Filing Jointly
Capital Gain
Tax Rate*
Section 1411
Medicare Surtax**
Combined
Tax Rate
$0 – $36,250
$0 – $72,500
0%
0%
0%
$36,250 – $200,000
$72,500 – $250,000
15%
0%
15%
$200,000 – $400,000
$250,000 – $450,000
15%
3.8%
18.8%
$400,001+
$450,001+
20%
3.8%
23.8%

The capital gain tax formula provided is to help you determine an approximate gain and amounts that may be deferred under Internal Revenue Code §1031.  Asset Preservation, Inc. (API), it’s officers or employees are not authorized or permitted under applicable laws to provide tax or legal advice to any client or prospective client of API. The tax related information contained herein or in any other communication that you may have with a representative of API should not be construed as tax or legal advice specific to your situation and should not be relied upon in making any business, legal or tax related decision.  A proper evaluation of the benefits and risks associated with a particular transaction or tax return position often requires advice from a competent tax and/or legal advisor familiar with your specific transaction, objectives and the relevant facts. We strongly urge you to involve your tax and/or legal advisor (or to seek such advice) in any significant real estate or business related transaction.