How to Calculate Your Adjusted Cost Basis for a 1031 Exchange

Every #1031 exchange begins with you determining your capital gain (or loss) from the sale or disposition of your property. This value is your Adjusted Cost Basis.

To determine this value, you start with your original purchase cost then add in any purchase expenses, your cost for capital improvements and principal payments of special assessments (if any). Once you have that total amount, you then subtract any depreciation you’ve taken or were allowed to take and any casualty or demolition losses you’ve claimed.

The resulting figure is your Adjusted Cost Basis, and this value guides the remainder of your 1031 exchange.

To find out how we can help you find and close on your next 1031 exchange property or to learn more about the exchange process and our qualified intermediary services, please visit our website.