After-tax return comparison.
The point of this page is narrow: the exchange path keeps more capital deployed on day one. That larger capital base changes the long-run outcome even before layered estate planning or chain modeling enter the picture.
For a simple forward-exchange illustration with no boot or additional cash. Both paths sell at the same future horizon. Debt, rental income, inheritance, reverse exchanges, improvements and partial-interest allocations are outside this model.
Illustrative portion of gain assumed to be taxed at 25% before the residual capital-gain layer.
Illustrative flat rate; Utah is 4.45% for 2026.
Applied to the full gain; the MAGI thresholds and the real estate professional exclusion are not modeled here.
Selling friction recognized today
Sell and pay tax
$250,000
Exchange and defer
$250,000
Immediate tax paid today
Sell and pay tax
$654,200
Exchange and defer
$0
Capital deployed after today's decision
Sell and pay tax
$4,095,800
Exchange and defer
$4,750,000
Tax basis carried forward
The exchange keeps the relinquished property's adjusted basis (IRC §1031(d)), so its deferred gain stays embedded.
Sell and pay tax
$4,095,800
Exchange and defer
$2,600,000
Projected gross value in 15 years
Sell and pay tax
$7,376,304
Exchange and defer
$8,554,482
After-tax value if sold in year 15
Both paths sold at the same selling-cost rate and taxed at the rates above; the exchange path's sale also taxes the deferred gain.
Sell and pay tax
$6,168,923
Exchange and defer
$6,500,051
1031Assist model revision 1. Editable assumptions, both sale calculations and application reconciliation in Excel. No saved property records are included.
Estimate for illustration — not tax or legal advice; confirm with your CPA/QI.
- Sell and pay tax
- Exchange and defer
The only point here is the capital-base difference. The exchange path starts with more money still invested because taxes were deferred instead of paid immediately.
Both paths are then grown at the same annual rate so the effect of the larger starting base stays visible and auditable.
It does not assume different leverage, different replacement-property quality, exchange pacing, or heir transfer mechanics. Those belong on the deeper simulator pages.
The ending after-tax row assumes both paths are sold at the end of the horizon at the same selling-cost rate. The exchange path keeps the relinquished property's adjusted basis (IRC §1031(d)), so that sale taxes the deferred gain as well as the appreciation, with the depreciation pool at 25%. Depreciation taken after today and any basis step-up at death (see Sell vs Exchange vs Hold) are not modeled.
The platform keeps basis, recapture, deferred tax, and exchange continuity together so the capital-base story remains coherent as investors move from one property to the next.
`Sell and pay tax` means taxes are recognized immediately and only the remaining after-tax proceeds continue compounding.
`Exchange and defer` means selling friction is still incurred, but immediate recognition is deferred so more capital remains in the next property or portfolio.
The difference between the two paths starts at transaction close, not years later.
This page is an illustrative public comparison, not tax, legal, or investment advice.
The calculations intentionally simplify depreciation recapture mechanics, state conformity details, NIIT thresholds, and reinvestment structure so the page can isolate the capital-base effect clearly.
Move from public assumptions into your actual property, deadlines, and support record.
Create accountTurn the public model into a saved working scenario inside your account.
Create free accountGet the deeper planning and workpaper layer when you need the real record.
View plansSell vs Exchange vs Hold
See the broader strategic framing with explicit strategy definitions.
Deferred Tax Over Time
See how deferred tax itself accumulates across a longer horizon.
50-Year Exchange Chain Example
Move into the full long-horizon simulator when you want transfer and pacing mechanics.