Calculators · Reinvestment
Replacement Property Requirements Calculator: Value, Equity and Debt to Replace
Enter the sale and the replacement you are considering. See the equal-or-greater tests in dollars, the equity you must reinvest, the debt gap, and the cash or allocated DST debt that would close it.
What this calculator does
To defer all of the gain, the replacement must be worth at least as much as what you sold net of selling costs, all of the net equity must go into it, and the debt you paid off must be replaced by new debt or by cash you add. Fall short on any test and the shortfall is boot.
This worksheet turns those three tests into dollar figures for a replacement you are looking at, and sizes the debt gap. The gap is what a zero cash flow DST or a leveraged DST interest can fill without personal borrowing, because the trust's non-recourse loan is allocated to you under Rev. Rul. 2004-86.
The three tests
How the numbers are calculated
Net equity = amount realized minus loan paid off. Value test: replacement price must be at least the amount realized. Equity test: cash going into the replacement from the exchange must equal the net equity, so unspent proceeds are cash boot. Debt test: new debt plus cash added must be at least the debt relieved; the shortfall is mortgage boot under Reg. section 1.1031(d)-2.
The DST sizing line shows the allocated debt needed at a given trust leverage: a trust at 50% loan-to-value allocates $1 of debt for every $1 of equity; a zero cash flow trust at 85% allocates about $5.67 per $1.
Questions about this calculator
Do I have to reinvest the whole sale price or just the gain?
Full deferral requires buying replacement property of equal or greater value and reinvesting all net equity; the gain alone is not the test. See reinvest the whole price or just the gain.
Can I replace debt with cash instead of a new loan?
Yes. Cash you add from outside the exchange offsets debt relief dollar for dollar. See replace the mortgage or add cash.
What if the lender will only give me a smaller loan?
The shortfall is mortgage boot unless you add cash or use a replacement whose allocated non-recourse debt fills the gap, which is what a zero cash flow DST is built for. See the new lender wants more down.
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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