{
  "slug": "1031-exchange-boot-basis",
  "title": "1031 Exchange Boot and Basis Calculator",
  "heading": "1031 Exchange Boot & Basis Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/1031-exchange-boot-basis",
  "summary": "Estimate taxable boot and new cost basis on a like-kind exchange.",
  "description": "A 1031 exchange defers capital gains tax only to the extent you reinvest all net proceeds into equal-or-greater value replacement property with equal-or-greater debt. Any shortfall — cash you pocket or debt relief you don't replace — is boot, and boot is taxed in the year of the exchange even though the rest of the gain is deferred. This calculator takes your relinquished property's sale price, selling costs, original basis, and the replacement property's purchase price and debt, and computes both cash boot and debt-relief boot, plus your new basis in the replacement property. New basis rolls forward: it's replacement cost minus the deferred gain, or equivalently your old adjusted basis plus any additional cash you put in, minus any boot received. Getting this wrong is the most common reason investors get an unpleasant tax bill despite thinking they'd fully deferred everything, because they forgot that paying down more debt than you replace also counts as boot.",
  "formula": "Realized gain = Net sale proceeds − adjusted basis; Cash boot = cash received; Debt boot = old debt payoff − new debt taken; Recognized gain = min(realized gain, total boot); New basis = replacement price − deferred gain.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=1031-exchange-boot-basis",
  "inputs": [
    {
      "id": "salePrice",
      "label": "Relinquished property sale price",
      "kind": "number",
      "hint": null,
      "default": 500000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "sellingCosts",
      "label": "Selling costs",
      "kind": "number",
      "hint": null,
      "default": 30000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "adjustedBasis",
      "label": "Adjusted basis of relinquished property",
      "kind": "number",
      "hint": null,
      "default": 260000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "oldDebtPayoff",
      "label": "Old mortgage payoff",
      "kind": "number",
      "hint": null,
      "default": 200000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "replacementPrice",
      "label": "Replacement property purchase price",
      "kind": "number",
      "hint": null,
      "default": 480000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "newDebt",
      "label": "New mortgage on replacement",
      "kind": "number",
      "hint": null,
      "default": 150000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "cashReceived",
      "label": "Cash taken out (not reinvested)",
      "kind": "number",
      "hint": null,
      "default": 20000,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "recognizedGain",
      "label": "Taxable boot (recognized gain)",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "deferredGain",
      "label": "Gain deferred",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "newBasis",
      "label": "New basis in replacement property",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalBoot",
      "label": "Total boot (cash + debt relief)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "realizedGain",
      "label": "Realized gain on sale",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Relinquished property sale price: 500000 $",
      "Selling costs: 30000 $",
      "Adjusted basis of relinquished property: 260000 $",
      "Old mortgage payoff: 200000 $",
      "Replacement property purchase price: 480000 $",
      "New mortgage on replacement: 150000 $",
      "Cash taken out (not reinvested): 20000 $"
    ],
    "outputs": [
      "Taxable boot (recognized gain): $70,000",
      "Gain deferred: $140,000",
      "New basis in replacement property: $340,000",
      "Total boot (cash + debt relief): $70,000",
      "Realized gain on sale: $210,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter relinquished property sale price ($).",
      "Enter selling costs ($).",
      "Enter adjusted basis of relinquished property ($).",
      "Enter old mortgage payoff ($).",
      "Enter replacement property purchase price ($).",
      "Enter new mortgage on replacement ($).",
      "Enter cash taken out (not reinvested) ($).",
      "Read your taxable boot (recognized gain) on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "salePrice": 300000,
        "sellingCosts": 18000,
        "adjustedBasis": 156000,
        "oldDebtPayoff": 120000,
        "replacementPrice": 288000,
        "newDebt": 90000,
        "cashReceived": 12000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "salePrice": 500000,
        "sellingCosts": 30000,
        "adjustedBasis": 260000,
        "oldDebtPayoff": 200000,
        "replacementPrice": 480000,
        "newDebt": 150000,
        "cashReceived": 20000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "salePrice": 800000,
        "sellingCosts": 48000,
        "adjustedBasis": 416000,
        "oldDebtPayoff": 320000,
        "replacementPrice": 768000,
        "newDebt": 240000,
        "cashReceived": 32000
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What exactly counts as boot?",
      "a": "Any non-like-kind value you receive: cash pocketed at closing, personal property thrown in, or 'debt relief' — meaning you paid off more mortgage debt than you took on in the new purchase. Even if you never touch that debt-relief cash, the IRS treats it as boot because your net equity position improved relative to like-kind debt."
    },
    {
      "q": "How do I avoid debt boot without extra cash?",
      "a": "Match or exceed your old loan balance with new debt, or add outside cash to the deal to make up the gap. Many investors deliberately take on slightly more replacement debt than the old payoff specifically to zero out debt boot."
    },
    {
      "q": "Does this calculator replace a qualified intermediary?",
      "a": "No. This gives you a planning estimate. A qualified intermediary and your CPA handle the actual exchange documents, 45-day identification, and 180-day closing deadlines, and they'll run exact numbers off closing statements."
    },
    {
      "q": "What happens to depreciation recapture in a 1031?",
      "a": "Section 1250 depreciation recapture is deferred along with the capital gain as long as no boot is recognized on that portion. If boot is present, recapture is generally recognized first, up to the amount of boot, before any capital gain portion is taxed."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/depreciation-recapture-sale",
    "https://www.revenuelab.fyi/toolbox/cost-segregation-first-year",
    "https://www.revenuelab.fyi/toolbox/seller-financing-note-yield"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — 1031 Exchange Boot and Basis Calculator (https://www.revenuelab.fyi/toolbox/1031-exchange-boot-basis)"
}