After Tax Equity X 4

5 Replies

Hey all,

I used a 1031 exchange calculator and after punching in the numbers the result was an after tax equity x 4 of $896,000.  What does this value mean?  Does it mean I have to buy a home at $896,000 to defer my taxes in a 1031 exchange or is it $224,000.  

Thanks
Yooch

Before you do anything a simple consultation with a tax attorney would be worth your while. You might even get a free answer if you can find a tax attorney that offers a free consultation. 

@Yoochul C. I don't know what this calculator you speak of is but the valuation requirements to completely defer alll tax in a 1031 exchange are that you must purchase at least as much as your net sales price (before mortgage payoff) and you must use all of the proceeds from the sale (after mortgage payoff) in the next purchase or purchases.  

The calculator may be giving you a 1031-no1031 comparison out 4 years but that doesn't have any impact on the procedural requirements to do the 1031

Hello, reviving a super old thread here, but I had this same question and I think I found the answer.  I believe the site you got the "After Tax Equity x 4" term is Asset Preservation Incorporated (https://apiexchange.com/capital-gain-tax-calculator/).  In that calculator they are trying to show the difference between a Sale and Then Repurchase (say years later) vs a Sale in a 1031 exchange.  The "x 4" bit is trying to highlight the purchasing power of each method using a 25% down payment.