Florida 1031 Like-Kind Exchange Calculator

How this calculator works

Section 1031 of the Internal Revenue Code is one of the oldest and most consequential provisions in U.S. tax law for real-estate investors. It lets an investor sell an investment or business-use property, roll the proceeds into a "like-kind" replacement property, and defer the federal capital gains tax (and the depreciation recapture, and the 3.8% Net Investment Income Tax) that would otherwise be due in the year of the sale. The gain is not forgiven — the adjusted basis of the relinquished property carries over to the replacement, so the deferred gain is preserved in the replacement's basis and eventually surfaces if the replacement is sold outright. But for an investor who keeps exchanging through their lifetime, the cumulative deferral can be massive, and a step-up in basis at death under IRC § 1014 can wipe the deferred gain out entirely.

Florida is a uniquely favorable jurisdiction for § 1031 planning, and for a reason that is structural rather than statutory: Florida has no state personal income tax. A California investor doing a § 1031 exchange might defer 23.8% in federal tax (20% long-term capital gains under IRC § 1(h) plus 3.8% NIIT under IRC § 1411) but still owe California state tax of up to 13.3% on the gain in the year of the sale, because California operates its own "clawback" regime when out-of-state replacement properties are eventually sold. Florida investors face none of that. The federal deferral is real, full, and undiluted. The number this calculator surfaces as your "deferred tax" is exactly the number you keep.

The four numbers the calculator computes

1. Realized gain. Sale price of the relinquished property minus its adjusted basis. Adjusted basis is your original purchase price (plus capitalized closing costs and capital improvements) minus accumulated depreciation taken over the hold period. This is the same number you would report on Form 4797 if you were selling the property outright.

2. Full-sale tax (counterfactual). What you would pay in federal tax if you sold the property outright and recognized the gain in the current year. This is the sum of three components: unrecaptured § 1250 depreciation recapture at the flat 25% rate on the lesser of accumulated depreciation or realized gain; long-term capital gains tax at your bracket (0%, 15%, or 20% under IRC § 1(h)) on the remaining appreciation portion; and the 3.8% Net Investment Income Tax under IRC § 1411 if your modified adjusted gross income is above the threshold ($250K married filing jointly, $200K single).

3. Boot. Anything you receive in the exchange that is not like-kind real property. The two common forms are cash boot (sale proceeds that come back to you because the replacement cost less than the relinquished property) and debt-relief boot (the old mortgage paid off exceeded the new mortgage assumed, so you walked away from net debt under Treas. Reg. § 1.1031(d)-2). Boot is taxable up to the amount of realized gain, with depreciation recapture sequenced first, then LTCG, then NIIT layered on top.

4. Deferred gain and net tax savings. Realized gain minus boot is deferred, rolling into the replacement property's basis. The net tax savings is the full-sale tax minus the boot tax minus the qualified-intermediary fee — the actual federal dollars you keep by exchanging instead of selling.

A Florida worked example

A Florida investor owns a single-family rental in Orlando, originally purchased in 2014 for $250,000 plus $50,000 of capitalized improvements (adjusted basis: $300,000). Over 12 years of hold, the investor has taken $50,000 of depreciation on Schedule E. The investor sells the property in 2026 for $700,000. The outstanding mortgage is $200,000; closing nets the investor $500,000 of equity. The investor wants to exchange into an $800,000 Tampa multifamily building, financing $300,000 of the purchase.

The numbers, run through the calculator at the 20% LTCG bracket with MAGI above the NIIT threshold:

• Realized gain: $700,000 sale price minus $300,000 adjusted basis equals $400,000.

• Full-sale tax (if not exchanging):

  • Unrecaptured § 1250 depreciation recapture: $50,000 of accumulated depreciation times 25% equals $12,500.
  • Long-term capital gains: ($400,000 minus $50,000) times 20% equals $70,000.
  • NIIT: $400,000 times 3.8% equals $15,200.
  • Total: $97,700.

• Boot analysis (exchange scenario):

  • Equity available from the sale: $700,000 minus $200,000 mortgage payoff equals $500,000.
  • Equity required for the replacement: $800,000 minus $300,000 new mortgage equals $500,000.
  • Cash boot: $500,000 minus $500,000 equals $0.
  • Debt-relief boot: $200,000 old payoff minus $300,000 new mortgage is negative, so it floors at $0.
  • Total boot: $0. Full deferral.

• Net tax savings: $97,700 deferred federal tax, minus the $1,500 qualified intermediary fee, equals $96,200 in real federal dollars the investor keeps by structuring the deal as a § 1031 exchange.

• Deadlines, assuming the relinquished property closes on day 90 (March 31):

  • 45-day identification deadline: May 15 (day 135). The investor must identify candidate replacement property(ies) in writing to the qualified intermediary.
  • 180-day exchange deadline: September 27 (day 270). The investor must close on the replacement property by this date — or the due date of the 2026 tax return (with extensions), whichever is earlier.

The Tampa multifamily comes with a new $500,000 of investor equity at risk and a $300,000 mortgage instead of the old $200,000 one — modest leverage, full deferral, and the $400,000 deferred gain rolls into a new basis of $400,000 ($800,000 purchase price minus $400,000 deferred gain) for depreciation purposes going forward.

What goes wrong, and the failure modes the calculator surfaces

The single most common failure mode in real-world Florida § 1031 exchanges is missing the 45-day identification window. The 180-day window gets all the attention, but 180 days is generous and most investors find a replacement well before it expires. The 45-day window is brutal — a month and a half from the day the relinquished property closes — and there is no extension for weekends, holidays, hurricanes, or the unique seasonal patterns of the Florida real-estate market. The professional defense is to identify aggressively (up to three properties under the 3-property rule, or any number under the 200% rule, even ones unlikely to close) and to identify early in the window.

The second failure mode is trading down. Investors sometimes assume they need to "spend the proceeds" but end up structuring a deal where the replacement property is cheaper than the relinquished property, generating cash boot. The math the calculator runs makes this concrete: if you sell for $700,000 and buy for $500,000 with the same financing posture, you will end up with $200,000 of cash boot, which means $200,000 of recognized gain in the current year. At a 20% LTCG bracket with 25% recapture sequencing and 3.8% NIIT, that costs about $48,000 in federal tax. The fix is straightforward: buy up, or split the deal into two replacement properties whose aggregate cost meets or exceeds the relinquished sale price.

The third failure mode is debt-relief boot. Investors who refinance the relinquished property aggressively before the sale (pulling out equity) or who buy a replacement with less leverage can wind up with old-mortgage-paid-off exceeding new-mortgage-assumed. That net debt relief is treated as boot under Treas. Reg. § 1.1031(d)-2. The calculator surfaces this number explicitly.

What this calculator does not do

This calculator is a planning and screening tool. It does not:

• Substitute for a qualified intermediary. The QI requirement is structural under Treas. Reg. § 1.1031(k)-1(g)(4): without a properly engaged QI, the taxpayer has constructive receipt of the sale proceeds and the exchange fails. The calculator estimates the QI fee as a line item; the QI is not optional.

• Cover § 121 primary-residence sales. A primary residence is governed by IRC § 121, which provides a $250,000 capital-gains exclusion for single filers (or $500,000 for married filing jointly) on the sale of a home owned and used as a primary residence for at least 2 of the last 5 years. § 121 is an exclusion (the gain is permanently exempt up to the cap); § 1031 is a deferral (the gain is pushed out, with basis carrying over). They cannot be stacked on the same property without changing its character. Florida snowbirds with mixed-use second homes occupy a gray zone; the safe-harbor framework is Rev. Proc. 2008-16.

• Handle reverse exchanges or improvement exchanges. In a reverse exchange, the taxpayer buys the replacement property before selling the relinquished property — useful when the replacement is uniquely available or the sale cannot close quickly enough. The structure requires an Exchange Accommodation Titleholder under Rev. Proc. 2000-37 and is substantially more expensive. The calculator assumes a standard delayed (forward) exchange.

• Account for related-party rules. IRC § 1031(f) restricts exchanges between related parties — the parties must hold their exchanged properties for 2 years after the swap, with limited exceptions. Cross-related-party exchanges are a frequent audit target.

• Apply outside the United States. § 1031 applies only to U.S. real property; you cannot exchange a U.S. property for a property in another country under the post-2017 statute.

Florida-specific considerations

Florida's documentary stamp tax under F.S. § 201.02 applies to both sides of a § 1031 exchange — the relinquished sale and the replacement purchase. That is a one-time transactional tax on the deed at $0.70 per $100 of consideration (or $0.60 plus surtax in Miami-Dade), and it is not deferred by § 1031. For a $700,000 relinquished sale plus an $800,000 replacement purchase, expect roughly $10,500 in combined Florida doc-stamp exposure on top of the QI fee and any mortgage doc stamps. The Florida Documentary Stamp Tax Calculator in this cluster handles the breakdown.

Florida investors should also note that the federal § 1031 deferral does not affect homestead status, Save Our Homes portability, or the assessed-value cap regime — those are personal-residence concepts that do not apply to investment property in the first place. A Florida investor holding a portfolio of investment properties and a separate homestead operates in two parallel tax universes: § 1031 for the investment side, § 121 / Save Our Homes for the homestead side. The two never intersect on the same parcel.

How this page is maintained

The § 1031 framework has been stable since TCJA 2017 restricted the provision to real property. The rate structure on depreciation recapture (25% under § 1(h)(6)) and NIIT (3.8% under § 1411) has been unchanged since the latter's enactment in 2013, and the § 1411 thresholds have not been adjusted for inflation since enactment — meaning the NIIT catches more filers every year. We monitor IRS guidance for procedural updates (Rev. Procs. on disaster relief, identification safe harbors, QI rules) and refresh the calculator after each material change.

Last reviewed: 2026-05-15 against IRC § 1031, IRC § 1411, IRC § 1(h) and § 1250, Treas. Reg. § 1.1031(k)-1, Treas. Reg. § 1.1031(d)-2, and the Tax Cuts and Jobs Act of 2017 (Pub. L. 115-97).