1031 Exchange Calculator
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The 1031 Exchange Guide for Investors
1. What a 1031 Exchange Really Is
A 1031 exchange lets you sell one investment property and buy another without paying capital gains taxes right away.
Instead of losing part of your profits to the IRS, you can reinvest the full amount into a new property.
Think of it as an interest-free loan from the government to grow your portfolio faster.
Example:
Sell a property with $500,000 equity.
If you sell outright, taxes may cut $65,000+.
With a 1031 exchange, you roll the full $500,000 into a new property—giving you more buying power.
2. Why It Matters for Investors
Keep More Equity Working for You – Grow wealth faster by compounding gains tax-free.
Diversify or Consolidate – Exchange one large property into multiple smaller ones, or the reverse.
Increase Cash Flow – Move from low-yield properties into higher-income assets.
Go Passive – Trade management-heavy properties into NNN leases for “mailbox money.”
Plan for the Future – If you “swap until you drop,” heirs inherit with a step-up in basis, often eliminating taxes completely.
3. The 5 Golden Rules (IRS Requirements)
Buy Equal or Greater Value – To defer all taxes, replacement property must be worth at least as much as what you sold.
Identify in 45 Days – You must name your new property (up to three options) in writing within 45 days.
Close in 180 Days – Both the sale and purchase must be completed within 180 days.
Use a Qualified Intermediary (QI) – IRS requires a neutral third-party to handle funds.
Property Must Be Investment/Business Use – Primary homes or vacation houses don’t qualify.
4. Do You Qualify?
If you own U.S. investment or business real estate (retail, industrial, multifamily, land, etc.), you likely qualify.
Not for “flippers” or developers. The IRS looks at intent—property should be held for investment, not quick resale.
Typical holding guideline: 2+ years is considered safe.
5. Myths to Ignore
“I have to buy the same type of property.” → False. You can trade land for a retail building, apartments for a NNN lease, etc.
“It has to be with the same buyer and seller.” → False. Sales and purchases can be with different parties.
“I’ll pay taxes later anyway.” → Not if you keep exchanging until death (step-up in basis wipes taxes).
“It’s too complicated.” → With the right advisor and QI, the process is straightforward.
6. Types of 1031 Exchanges
Forward Exchange (most common) – Sell first, then buy within 180 days.
Reverse Exchange – Buy first, then sell (QI “parks” the property until you close).
Improvement Exchange – Use proceeds for renovations or new construction.
Simultaneous Exchange – Sell and buy same day (rare today).
7. Key Documents You’ll See
Exchange Agreement with your QI
Assignment of Sale Agreement
Settlement Statement noting 1031 structure
45-Day Identification Letter
IRS Form 8824 filed with your taxes
8. How to Maximize Benefits
Reinvest all your cash proceeds.
Match or exceed the sale price with your purchase.
Use exchanges to trade into NNN properties for stability, predictable income, and hands-off management.
9. Why Work With Triple Net Investment Group
Specialized in NNN & 1031 buyers – over 20 years focused on tax-advantaged investment sales.
Nationwide inventory – corporate tenants, ground leases, shopping centers.
Proven experience – $2B+ in transactions completed.
Hands-on guidance – from property selection to coordinating with your QI and CPA.
10. Next Steps
Reach out before you list your property—we’ll map out exchange options early.
Get matched with replacement NNN properties that fit your timeline and goals.
Work with your QI and CPA to finalize documentation.
Close within IRS timelines and keep your capital working for you.