§1031 Exchange · Defer · Reinvest · Compound
Defer the tax. Stay invested in real estate.
Sell a Hawaiʻi investment property and roll every dollar of gain into the next one — no federal capital gains, no depreciation recapture, no NIIT, no Hawaiʻi state tax. The tradeoff is timing: 45 days to identify, 180 days to close. Plug in your numbers and see what's actually at stake.
1031 Calculator · Sale vs Exchange
What does a §1031 actually save you?
Live arithmetic. Federal LTCG, depreciation recapture, NIIT, and Hawaiʻi state cap-gains all in one ledger. None of this is tax advice — show your CPA before you commit.
If you sell outright
$292,555
total tax bill
- Recapture (25%)
- $50,000
- Federal LTCG (20%)
- $142,000
- NIIT (3.8%)
- $34,580
- Hawaiʻi cap-gains (7.25%)
- $65,975
- Net cash to you
- $837,445
If you 1031 exchange
$292,555
tax deferred
- Realized gain
- $910,000
- Cash to redeploy
- $1,130,000
- Additional buying power
- $292,555
- Identify by
- 45 days
- Close by
- 180 days
Find replacement properties
Live Kauaʻi MLS at or above $1.50M
45 days to identify · 180 days to close · Qualified Intermediary required from day one. A Kauaʻi specialist can hand you off to a vetted QI.
How a 1031 works
The whole exchange in five moves.
§1031 is one of the cleanest tax provisions in real estate, but it's procedurally strict. Miss a deadline or skip the QI and the deferral collapses — you owe the full tax. Here's the path the IRS expects you to walk.
- Step 1
Hire a QI before close
A Qualified Intermediary holds proceeds in escrow. If you touch the cash, the exchange dies. Engage a QI before the relinquished sale closes.
- Step 2
Sell the relinquished property
Closing day starts both clocks. Funds wire directly from escrow to the QI — never to you. Your CPA gets a copy of the assignment.
- Step 3
Identify replacements in 45 days
Three properties (the 3-property rule), or unlimited as long as their total value ≤ 200% of relinquished. Identification is in writing to the QI.
- Step 4
Close in 180 days
From the day you sold. No extensions for hurricanes, family events, or paperwork. Close one of the identified properties before day 180.
- Step 5
Defer indefinitely
The basis from the relinquished property carries to the replacement. Roll again later. Step-up at death zeroes out deferred gain entirely.
The equal-or-up rule
Replacement value ≥ relinquished value. Replacement debt ≥ relinquished debt.
Buy a cheaper replacement and the price difference becomes taxable "boot." Take less debt on the replacement and the debt relief is taxable boot too — unless you bring outside cash to cover. The Calculator's advanced strip flags both cases the moment you fill in your replacement target.
What counts as like-kind
Real estate for real estate. That's the whole rule.
Post-TCJA, §1031 is real-estate only. Within that scope it's generous — almost any U.S. investment real estate can swap for almost any other.
Yes, you can swap
- Kauaʻi STR condo → Mainland multifamily
- Raw land → Improved rental property
- Hotel-condo unit → SFR rental
- Single property → Three replacement properties
- Hawaiʻi → any other U.S. state
- Fee Simple ↔ Long-term Leasehold (≥30 years remaining)
No, these break the exchange
- Primary residence (use §121 instead)
- Property held primarily for resale (flips)
- Stocks, bonds, partnership interests
- Foreign real estate ↔ U.S. real estate
- Receiving cash directly at sale (becomes boot)
- Buying from / selling to a related party (2-year rule)
When the clock starts
45 days is not a lot of time. Start with a Kauaʻi specialist.
A Kauaʻi specialist coordinates the QI hand-off, runs replacement comps against your equity position, and surfaces off-market inventory that fits your identification window. The earlier the call, the easier the close.
None of this is tax or legal advice. Every 1031 needs a CPA and a Qualified Intermediary; we surface the consequence so you walk in informed.