1031 Exchange Calculator

Screen Shot 2018-05-16 at 9.13.26 AM.png

Check it out at this link! Originally created for the post: ‘Quick Primer on the 1031 Exchange’

What it is

A model that helps you to calculate the financial implications of a 1031 exchange – which is a great way to defer depreciation recapture and capital gains tax. By providing information on the relinquished property (one you are selling), and the replacement property (one you are buying), it will tell you how much depreciation recapture and capital gains you will need to pay. It will also highlight your new depreciation basis going forward, so you can determine the future depreciation level on the new property.

Why I created it

There are a ton of articles out there trying to describe how a 1031 exchange works. It’s not actually that complicated, but the various ‘advisors’ weighing in have managed to make it sound more daunting than it really is. This tool is designed to help simplify the conversation. Providing the right inputs will get you an answer on how things will work. Then you just need to choose the right advisor to help you execute the actual sale and purchase. The execution of the deal is where the complexity lies.

How you can use it

Make a copy of the calculator, then feel free to edit the inputs to understand the implications of your deal. Please keep in mind, this is meant to be illustrative of how the exchange should work. This will not necessarily capture all of the complexity of your own specific deal, so you should consult an expert in this area to help with the actual deal. This tool is just instructive as to how things should behave given the inputs you provide.

Enjoy!

Ramen-san

Leave a Reply