1031 Exchange

cissellers-headerDo you own an investment property? Are you interested in increasing your wealth through real estate investment? Are you interested in cashing out for your retirement or do you want to parlay your money into a higher return?

As the Principal Broker for Commercial Investment Strategies, I have the experience to increase your returns well beyond the CD and without the risk of the high-stakes stock market. Whether you are interested in self-managing or hands-off Real Estate Investment Trusts, NNN Tenants, or Tenant In Common returns, I can help you achieve your investment return goals. I have transacted multiple 1031 tax exchanges for myself and my clients, and I know how to increase your return. With a fine eye on deadlines and the other requirements of 1031 exchanges, I’ll help you find the exit strategy that best suits your unique situation and place you in an investment that meets your financial goals.

This calculator is provided as a tool for you to estimate your exchange funds. Please consult with your tax advisor to find out your specific and unique tax situation.

[TBS_BUTTON id=”callus” link=”tel:+18084291098″ class=”btn-primary” ]Call 808-429-1098[/TBS_BUTTON] [TBS_BUTTON id=”reachus” link=”reach-us” class=”btn-primary” ]Contact Me today for more information.[/TBS_BUTTON]

Please note that the program will calculate your numbers only after you have input data into all fillable fields. Currently, Hawaii's tax is 7%, but you don't need to use the "%" in your calculation. Further, this formula does not include the 3.8% Medicare tax, effective January 1, 2013, which applies to Adjusted Gross Income (AGI) over $200K for singles, $250K for couples. See my blog for more on this subject.
To calculate your estimated capital gain first subtract the adjusted basis from the sales price, then subtract the costs of your transaction, commission, fees, transfer tax, etc. Finally, multiply the capital gain by your combined tax rates (Federal and State) to determine your estimated capital gain tax.
1: Calculate Net Adjusted Basis
Purchase price  
Plus Capital Improvements  
Minus Depreciation Taken  
Equals Adjusted Basis

=

(Purchase price) + (Capital Improvements) - (Depreciation Taken)
     
2: Calculate Capital Gain
Current Sales Price  
Minus Exchange Expenses Including commissions, etc.
Minus Adjusted Basis

=

 
Equals Capital Gain

=

(Current Sales Price) - (Exchange Expenses) -(Adjusted Basis)
     
3: Calculate Capital Gain Tax
State Capital Gain Tax Rate The capital gain tax rate in your state (Hawaii's tax is 7%)
Gain Attributable to Depreciation

=

(Depreciation Taken) x 25%
Plus Federal Capital Gain Tax

=

((Capital Gain) - (Depreciation Taken)) x 15%
Plus State Capital Gain Tax

=

((Capital Gain) - (Depreciation Taken)) x (State Capital Gain Tax Rate)
Equals Combined Tax Due

=

(Recaptured Depreciation) + (Federal Capital Gain Tax) + (State Capital Gain Tax)
     
The formula set forth above is provided to help you determine your approximate gain and the sums that you may wish to defer through your exchange transaction. Consult with your tax advisor to determine the correct values and whether an exchange is appropriate for your circumstances.
     
100% Deferral
To fully defer state and federal capital gain taxes, the Exchanger must reinvest all exchange proceeds and either acquire property with equal or greater debt or reinvest additional cash equal to the debt relief. The following worksheet is a useful tool for determining the amount of cash and debt that should go into the replacement property. Your debt in the property matters! See my blog for more on this subject.
     
RELINQUISHED PROPERTY
Your minimum down payment for the replacement property should be equal to or greater than the net proceeds from the sale of your relinquished property. Otherwise, you may have boot in the form of cash.
     
Relinquished Property
Original Purchase Price

=

 
Minus Existing Loans  
Minus Exchange Expenses

=

 
Equals Net Proceeds

=

 
Replacement Property
Purchase Price

=

 
Minus New Loans  
Equals Minimum Down

=