How Real Estate Tax Desk Calculates Your Exchange

Deadlines

Both deadlines run from the date the relinquished property transfers. Real Estate Tax Desk counts 45 calendar days to the identification deadline and 180 calendar days to the statutory exchange-completion date, counting the day after transfer as day one.

The 180-day date is the statutory outer limit. Your actual completion deadline can be earlier, because the exchange period ends on the due date (including extensions) of your tax return for the year of the transfer if that date comes first. When you supply a return due date, Real Estate Tax Desk shows the earlier of the two and labels which one applies.

Replacement-value target

The full-deferral planning target for replacement value is the relinquished sale price less selling costs you enter. It is a planning target, not a determination that any amount of gain is deferred.

Equity reinvestment

Equity available for reinvestment is derived from the sale price less selling costs and less debt paid off at closing. When you have not supplied selling costs or debt payoff, the figure is labelled preliminary and is not treated as complete.

A potential shortfall appears only when the values you supplied are sufficient to compute one. Real Estate Tax Desk never substitutes an assumed value for one you did not provide.

Identification framework

Real Estate Tax Desk applies the three-property rule and the 200% rule to the candidate values you enter, and describes the 95% exception for educational purposes only. Identification status is shown only when the inputs needed to evaluate it are present.

Any identification worksheet Real Estate Tax Desk produces is labelled a draft and is not submitted by Real Estate Tax Desk to any party.

Property economics

Cap rate is annual net operating income divided by purchase price. Debt service coverage is annual net operating income divided by annual debt service. Each is shown only when you supply the inputs it requires; neither is estimated.

Data limitations

Every figure comes from the information you enter. Real Estate Tax Desk does not source appraisals, rent rolls, title records or market data, and it does not infer missing values from extracted documents. Where the inputs are incomplete, results are labelled estimated or preliminary and no qualification conclusion is drawn.

Real Estate Tax Desk also does not evaluate whether your transaction qualifies under §1031. It asks basic applicability questions and reports what remains unconfirmed.

Sources

• IRC §1031
• Treas. Reg. §1.1031(k)-1
• IRS Publication 544