Calculators · Decision
Exchange vs Sell: 10-Year After-Tax Model
Pay the tax now and reinvest what is left, or defer it all through a 1031 exchange and pay later. Side by side over ten years with your own return assumptions, with the hold-to-death step-up as an option.
What this calculator does
Paying the tax now shrinks the amount that compounds; deferring keeps the tax working for you but the bill is still waiting at the next cash sale unless you hold to death. The comparison depends on the tax rate, the return you expect, the holding period and any one-time cost of the exchange route.
Enter your figures. The model grows both paths at the same pre-tax return, taxes the exchange path's deferred gain at the end (or not, with the step-up option), and shows the after-tax result. It assumes nothing about any product's return; it is a comparison engine for your own assumptions.
Two paths, ten years
How the numbers are calculated
Sell path: (equity − tax today) grows at the entered return for the entered years; at the end, the growth is taxed at the exit rate. Exchange path: (equity − one-time cost) grows at the same return; at the end, both the growth and the originally deferred gain are taxed at the exit rate, unless the step-up option is on, in which case nothing is taxed at the end. Returns are applied annually with no interim distributions taxed, so both paths are treated the same way.
The exit rate is a single blended rate you choose (federal layers plus state). Use the 1031 exchange calculator to find today's figure and a reasonable blended rate.
Questions about this calculator
Why does the exchange side still show a tax at year ten?
Deferred gain is not forgiven unless you hold to death, so the model taxes it when the replacement is sold in year ten. Switch the step-up option on to see the hold-to-death outcome, where section 1014 resets basis for heirs.
What return should I enter?
Whatever you would honestly expect from the two choices, before tax. The model is a comparison engine, not a forecast, and it does not assume any product's return. See three futures for your equity.
Where do DST fees fit?
Enter them as the one-time cost on the exchange side. A load is paid once; the tax on a sale is paid once too. The question is which one-time cost is smaller against the same future. See DST fees vs the tax bill.
Sources
Figures checked on September 30, 2026. Rates and thresholds change each year; this page is general information, not tax or legal advice.
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