Sterman Multifamily Group · Free Tool

What would a 1031 exchange save you?

Estimate capital gains tax, depreciation recapture, and the net tax benefit of exchanging instead of selling outright. Four inputs. Real numbers.

If you sell outright

Total capital gain

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Sale price minus adjusted cost basis.

Depreciation recapture tax (25% federal)

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Federal capital gains + NIIT (23.8%)

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California state tax (up to 13.3%)

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Total tax if sold outright

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If you do a 1031 exchange

Taxable boot (if trading down)

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Tax on boot

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Tax deferred via exchange

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Tax liability rolled forward into the replacement property's basis. Preserved, not forgiven.

1031 Timeline

Day 0 Close on sale

Day 45 Identify replacements (in writing)

Day 180 Close on replacement (hard deadline)

A 1031 is a calendar problem, not a tax problem. The rules are not negotiable. The penalty for missing a deadline is the full tax bill above. Most exchanges that go sideways went sideways in the first thirty days.

Michael Sterman has closedin LA multifamily and guided clients through hundreds of 1031 exchanges. For an actual strategy on yours — including whether a 1031 is right for your situation and how to sequence it — request a free evaluation.

Tax estimates use simplified top-bracket rates: 25% federal depreciation recapture, 20% federal long-term capital gains + 3.8% NIIT, 13.3% California top-bracket state tax. Your actual liability depends on your total income, filing status, holding period, and other variables. This is not tax advice. Consult a CPA or tax attorney before acting.