Use this interactive 1031 Exchange, Taxable Boot & 25% Depreciation Recapture Calculator (2026) to model your exact 2026 financial, tax, mortgage, or closing cost position across New York City, New York State, New Jersey, Connecticut, Massachusetts, Pennsylvania, and Florida—with zero personal information required. Click any 1-Click Benchmark pill inside the simulator to load verified East Coast scenarios, or click Copy Custom Scenario Link to share a deep-linked calculation.
1031 Exchange, Taxable Boot & 25% Depreciation Recapture Calculator (2026)
Computes deferred Federal, 3.8% NIIT, and NY/NJ/FL capital gains taxes, IRC § 1250 25% unrecaptured depreciation tax, and taxable cash/mortgage boot when trading investment property.
For a comprehensive line-by-line legal breakdown, worked household examples, and filing instructions, read our companion pillar report: Complete 2026 Statutory Guide & Case Studies →
2026 Statutory Parameters, Rates & Legal Citations
| Statutory Component | 2026 Rate / Limit | Application & Thresholds | Primary Authority |
|---|---|---|---|
| IRC § 1250 Unrecaptured Depreciation Rate | 25.0% Federal Max + 3.8% NIIT | First layer of gain taxed when selling depreciated building | IRC § 1(h)(1)(E) |
| Federal Long-Term Capital Gain + NIIT | 15.0% or 20.0% + 3.8% NIIT | 23.8% combined federal rate on appreciation above original cost | IRC § 1 & § 1411 |
| NYC / NY / NJ State Capital Gain & Recapture | 14.78% NYC / 10.75% NJ / 0% FL | NY & NJ tax both capital gains and depreciation recapture as ordinary income | NYS IT-201 / NJ-1040 |
| 45-Day Identification / 180-Day Closing Rule | Strict Calendar Deadlines | 3-Property Rule or 200% Fair Market Value Rule via Qualified Intermediary | Treas. Reg. § 1.1031(k)-1 |
Frequently Asked Questions & Statutory Rules (2026)
What is "Mortgage Boot" in a 1031 exchange and how do I avoid it?
Under IRC § 1031(d), any reduction in your mortgage debt between the relinquished property you sold and the replacement property you purchased is treated as taxable "debt relief boot"—even if you never touched a dollar of cash. To achieve $0 boot, your replacement property price must be greater than or equal to your net sale price AND your new debt (plus any fresh cash added) must equal or exceed your paid-off loan.
Does a 1031 exchange defer the 25% IRC § 1250 depreciation recapture tax?
Yes! In a properly structured 1031 like-kind exchange, both the 20% federal long-term capital gains tax AND the 25% IRC § 1250 unrecaptured depreciation tax (plus 3.8% NIIT and state income taxes) roll over into the carryover basis of the replacement property.
If I sell a New York or New Jersey building and 1031 exchange into a Florida property, do I owe NY/NJ exit tax?
A valid 1031 exchange defers New York and New Jersey income tax at the time of the trade (in NJ, file Form GIT/REP-3 Box 7 for a 1031 exchange exemption from the 2% exit withholding). However, keep records of your deferred NY/NJ gain.
Are closing costs like broker commissions and transfer taxes deducted before calculating 1031 boot?
Yes. Under IRS Revenue Ruling 72-456, routine transactional selling expenses—including real estate broker commissions, transfer taxes, title fees, and Qualified Intermediary fees—reduce your net realized amount and do not trigger taxable boot.