1031 Debt Replacement Calculator
Full deferral has two conditions. You must buy replacement property worth at least your net sale price, and you must reinvest all of your equity while replacing all of the debt you paid off. The part people miss is that debt and cash are interchangeable: if your lender will not write a large enough loan, your own money closes the gap just as well.
Your result
What full deferral requires
These three hold whatever you end up buying. They are fixed by your sale.
Buy replacement property worth at least
Your sale price less selling costs.
$940,000
Reinvest equity of
Everything the intermediary holds. None of it can come back to you.
$540,000
Replace debt of
With a new loan, or with your own cash — the two are interchangeable.
$400,000
Against the property you entered
On these figures the exchange defers in full: you are buying $940,000 against a $940,000 net sale price, and every dollar of equity goes into the purchase. You will need to bring $200,000 of your own money to the closing, which is not boot — it is you buying more property.
Replacement as a share of net sale price
100%
Value shortfall
Buying below your net sale price is taxable to the extent of the gap.
$0
Debt shortfall
Cover it with a larger loan or with your own cash. Either works.
$200,000
Outside cash needed to close
$200,000
Exchange equity left unused
Returned to you after the purchase, and taxable as cash boot.
$0
Your options
- Borrow $200,000 more against the replacement property.
- Or bring $200,000 of your own cash into the purchase instead. Debt and outside cash replace debt equally well.
Want the detail?
Your three requirements, the shortfalls against the property you entered, and the ways to close each one — the brief to hand an agent or a lender.
Replacing debt is the requirement most likely to need a lender who has done exchanges before, on a 45-day clock. We can introduce one.
Your result above is complete and stays on the page whether or not you fill this in.
How much debt do I need to replace in a 1031 exchange?
What you must buy, reinvest and borrow — or pay in cash instead — to defer in full.
Now find the property
- Listings at $940,000 and aboveFiltered to the value you need to buy for full deferral, so nothing you look at can put you short.
- Post what you need to buyGive sellers your value, your debt and your deadline, and let matching property come to you.
- See what a shortfall would costTurn the gaps above into the actual taxable figure before you commit to a property.