Reference, Appendix F
Computation Worksheets and Timelines
This appendix sets out the recurring computations and deadlines of exchange practice in a form that can be worked line by line. Each worksheet states the rule it applies, cites its authority, and refers to the sections where the rule is developed.
Reviewed by Nicholas A. Henault, Esq. on October 23, 2026. This reference is general information about section 1031, not tax or legal advice for your transaction. Talk to your own tax adviser or attorney before you rely on it.
Prepared by the BlueLion 1031 exchange team
The worked figures are those of the computations in Chapter 39 and of the regulations' own examples, so every result can be checked against its source. The worksheets organize the analysis and do not replace it. Several steps turn on judgments the chapters address, such as whether a liability was assumed (34.1), what counts as an exchange expense (33.5), and when property was transferred (26.3).
F.1 Realized gain, boot, and recognized gain
The worksheet follows the sequence of Chapter 39. It is written for the ordinary deferred exchange, in which the commission, the intermediary's fee, and the settlement charges are paid at the relinquished property closing out of the gross price, so that the funds the intermediary receives are already net of them. In that case the expenses are counted once, on line 2, and are not subtracted again from boot or added again to basis.
The return instructions direct that exchange expenses reduce boot, and that expenses not used for that purpose be added to the basis of the property given up. Those instructions assume the expenses have not already been netted out of the figures entered. The return position should be reconciled to this computation so that no item is counted twice (33.5, 35.4, and the introduction to Chapter 39).
| Line | Item | Rule |
|---|---|---|
| 1 | Gross consideration for the relinquished property, including liabilities paid off or assumed at closing | Chapter 39, step 1 |
| 2 | Exchange expenses paid out of the gross price | 33.5 |
| 3 | Amount realized (line 1 less line 2) | Chapter 39, step 1 |
| 4 | Adjusted basis of the relinquished property | |
| 5 | Realized gain or loss (line 3 less line 4) | I.R.C. § 1001(a) |
| 6 | Cash received by the taxpayer, including exchange funds released to the taxpayer | I.R.C. § 1031(b) |
| 7 | Fair market value of other property received | I.R.C. § 1031(b) |
| 8 | Liabilities of which the taxpayer is relieved | Treas. Reg. § 1.1031(d)-2 |
| 9 | Liabilities the taxpayer assumes, or takes property subject to, in acquiring the replacement property | Treas. Reg. § 1.1031(d)-2 |
| 10 | Cash the taxpayer contributes to the exchange from outside funds | Treas. Reg. § 1.1031(d)-2, Example 2(c) |
| 11 | Net liability relief (line 8 less lines 9 and 10, but not less than zero) | Treas. Reg. § 1.1031(d)-2, Example 2(c); 33.3 |
| 12 | Boot (add lines 6, 7, and 11). Lines 9 and 10 do not reduce lines 6 and 7. | 33.3 |
| 13 | Recognized gain (the lesser of line 5 and line 12). If line 5 is a loss, no loss is recognized. | I.R.C. § 1031(b), (c) |
| 14 | Deferred gain (line 5 less line 13) |
Worked figures from Chapter 39.
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| Line | 39.1 | 39.2 | 39.3 | 39.4 |
|---|---|---|---|---|
| 1. Gross consideration | $2,400,000 | $2,400,000 | $2,400,000 | $2,400,000 |
| 2. Exchange expenses | 160,000 | 160,000 | 160,000 | 150,000 |
| 3. Amount realized | 2,240,000 | 2,240,000 | 2,240,000 | 2,250,000 |
| 4. Adjusted basis | 650,000 | 650,000 | 650,000 | 650,000 |
| 5. Realized gain | 1,590,000 | 1,590,000 | 1,590,000 | 1,600,000 |
| 6. Cash received | 0 | 240,000 | 0 | 0 |
| 7. Other property received | 0 | 0 | 0 | 60,000 |
| 8. Liabilities relieved | 900,000 | 900,000 | 1,500,000 | 900,000 |
| 9. Liabilities assumed | 1,260,000 | 900,000 | 1,200,000 | 1,100,000 |
| 10. Outside cash contributed | 0 | 0 | 300,000 | 0 |
| 11. Net liability relief | 0 | 0 | 0 | 0 |
| 12. Boot | 0 | 240,000 | 0 | 60,000 |
| 13. Recognized gain | 0 | 240,000 | 0 | 60,000 |
| 14. Deferred gain | 1,590,000 | 1,350,000 | 1,590,000 | 1,540,000 |
The regulation's netting example. The regulation works the netting rule on both sides of a two-party exchange. D, with an adjusted basis of $100,000 and an $80,000 mortgage, receives E's apartment house, worth $250,000 and subject to a $150,000 mortgage, and $40,000 of cash. E, with an adjusted basis of $175,000 and a $150,000 mortgage, receives D's apartment house, worth $220,000 and subject to the $80,000 mortgage, and pays the $40,000. Treas. Reg. § 1.1031(d)-2, Example 2.
| Item | D | E |
|---|---|---|
| Realized gain | $120,000 | $75,000 |
| Liabilities relieved | 80,000 | 150,000 |
| Less liabilities assumed | 150,000 | 80,000 |
| Less cash paid | 0 | 40,000 |
| Net liability relief (not less than zero) | 0 | 30,000 |
| Cash received | 40,000 | 0 |
| Boot | 40,000 | 30,000 |
| Recognized gain | 40,000 | 30,000 |
D's excess of liabilities assumed does not offset the cash D received. E's cash paid does offset the liabilities of which E was relieved.
F.2 Basis of the replacement property
Chapter 39 computes basis as the cost of the property received less the deferred gain, and checks the result against the section 1031(d) formula. The basis of all property received is then allocated, with other property taking its fair market value and the like-kind property taking the remainder, and the depreciable portion is divided into exchanged basis and excess basis (35.1, 35.2, 36.1).
| Line | Item | Rule |
|---|---|---|
| 15 | Cost of all property received, like-kind and other | |
| 16 | Basis of all property received (line 15 less line 14) | Chapter 39, step 6 |
| 17 | Check: line 4, plus lines 9 and 10, less lines 8 and 6, plus line 13. The result should equal line 16. | I.R.C. § 1031(d); Treas. Reg. §§ 1.1031(d)-1(a), (b), 1.1031(d)-2 |
| 18 | Basis of other property received, equal to its fair market value (line 7) | Treas. Reg. § 1.1031(d)-1(c) |
| 19 | Basis of the like-kind replacement property (line 16 less line 18) | Treas. Reg. § 1.1031(d)-1(c) |
| 20 | Portion of line 19 allocated to depreciable improvements by relative fair market value | 39.1 |
| 21 | Adjusted depreciable basis of the relinquished property | Treas. Reg. § 1.168(i)-6(b) |
| 22 | Exchanged basis (the lesser of line 20 and line 21) | Treas. Reg. § 1.168(i)-6(b); 36.1 |
| 23 | Excess basis (line 20 less line 22) | Treas. Reg. § 1.168(i)-6(b); 36.1 |
Worked figures from Chapter 39. Chapter 39 does not allocate basis between land and improvements in 39.2 and 39.3.
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| Line | 39.1 | 39.2 | 39.3 | 39.4 |
|---|---|---|---|---|
| 15. Cost of property received | $2,600,000 | $2,000,000 | $2,240,000 | $2,450,000 |
| 16. Basis of property received | 1,010,000 | 650,000 | 650,000 | 910,000 |
| 17. Section 1031(d) check | 1,010,000 | 650,000 | 650,000 | 910,000 |
| 18. Other property | 0 | 0 | 0 | 60,000 |
| 19. Like-kind replacement property | 1,010,000 | 650,000 | 650,000 | 850,000 |
| 20. Depreciable improvements | 757,500 | not computed | not computed | 680,000 |
| 21. Relinquished adjusted depreciable basis | 350,000 | not computed | not computed | 380,000 |
| 22. Exchanged basis | 350,000 | not computed | not computed | 380,000 |
| 23. Excess basis | 407,500 | not computed | not computed | 300,000 |
The regulation's two-party example produces the same check. D's basis is $100,000, plus $150,000 of liabilities assumed, less $80,000 of liabilities relieved and $40,000 of cash received, plus $40,000 of recognized gain, or $170,000. E's basis is $175,000, plus $80,000 of liabilities assumed and $40,000 of cash paid, less $150,000 of liabilities relieved, plus $30,000 of recognized gain, or $175,000 (35.1). In the regulation's allocation example, a taxpayer with a $10,000 basis who received real estate worth $9,000, an automobile worth $2,000, and $1,500 of cash, and recognized all $2,500 of realized gain, takes an $11,000 basis, of which $2,000 is assigned to the automobile and $9,000 to the real estate. Treas. Reg. § 1.1031(d)-1(c) (35.2).
F.3 Identification and exchange periods
| Rule | Authority | Discussed at |
|---|---|---|
| Both periods begin on the date the taxpayer transfers the relinquished property. That date is day zero, and each period ends at midnight on the numbered day thereafter. The two periods run concurrently. | Treas. Reg. § 1.1031(k)-1(b)(2)(i), (ii) | 26.3 |
| Property is transferred when it is disposed of within the meaning of section 1001(a). | Treas. Reg. § 1.1031(k)-1(b)(2)(iv) | 26.3 |
| The identification period ends at midnight on the 45th day. | I.R.C. § 1031(a)(3)(A); Treas. Reg. § 1.1031(k)-1(b)(2)(i) | 25.1 |
| The exchange period ends at midnight on the earlier of the 180th day or the due date, including extensions, of the return for the taxable year in which the transfer occurs. | I.R.C. § 1031(a)(3)(B); Treas. Reg. § 1.1031(k)-1(b)(2)(ii) | 26.1, 26.2 |
| Where relinquished properties in the same exchange are transferred on different dates, both periods run from the earliest transfer. | Treas. Reg. § 1.1031(k)-1(b)(2)(iii) | 26.3 |
| The regulation provides no extension for a period that ends on a weekend or legal holiday. Whether section 7503 could reach an identification has not been resolved by published authority. | Treas. Reg. § 1.1031(k)-1(b)(2); I.R.C. § 7503 | 26.3 |
| The one recognized extension is postponement for a federally declared disaster (F.4). | Rev. Proc. 2018-58, § 17 | 26.4 |
Date worksheet.
| Line | Item |
|---|---|
| T1 | Date of the transfer of the relinquished property, or of the earliest transfer if there is more than one (day zero) |
| T2 | End of the identification period: midnight on the date 45 days after line T1 |
| T3 | Midnight on the date 180 days after line T1 |
| T4 | Due date of the return for the taxable year that includes line T1, including any extension actually obtained |
| T5 | End of the exchange period: the earlier of lines T3 and T4 |
The regulation's example. A calendar-year corporation transfers relinquished property on November 16, 1992. Treas. Reg. § 1.1031(k)-1(b)(3).
| Line | Return not extended | Automatic six-month extension allowed |
|---|---|---|
| T1 | November 16, 1992 | November 16, 1992 |
| T2 | December 31, 1992 | December 31, 1992 |
| T3 | May 15, 1993 | May 15, 1993 |
| T4 | March 15, 1993 | The extended due date, which is after May 15, 1993 |
| T5 | March 15, 1993 | May 15, 1993 |
Three computed examples. The weekdays are given because no weekend extension applies.
- A taxpayer transfers relinquished property on Monday, March 2, 2026. The identification period ends at midnight on Thursday, April 16, 2026. The 180th day is Saturday, August 29, 2026. For a calendar-year taxpayer the return for 2026 is not due until 2027, so the exchange period ends at midnight on Saturday, August 29, 2026, and the weekend does not extend it.
- A calendar-year individual transfers relinquished property on Friday, November 20, 2026. The identification period ends at midnight on Monday, January 4, 2027. The 180th day is Wednesday, May 19, 2027. Assuming the 2026 return is due April 15, 2027, the exchange period ends at midnight on April 15, 2027, unless the return is extended, in which case it ends at midnight on May 19, 2027. This is the calendar accident examined at 26.2, and the reason an extension should be filed as a matter of routine for a fourth-quarter relinquishment.
- A taxpayer transfers two relinquished properties in the same exchange, one on Monday, March 2, 2026, and the other on Friday, May 1, 2026. Both periods run from March 2, 2026. The identification period therefore ended on April 16, 2026, before the second closing, and the exchange period ends on August 29, 2026 (26.3, 39.4).
F.4 Disaster postponement
| Step | Rule | Authority |
|---|---|---|
| 1. Deadlines covered | The last day of a 45-day identification period, of a 180-day exchange period, and of a period set forth in section 4.02(3) through (6) of Revenue Procedure 2000-37, if that day falls on or after the date of a federally declared disaster. | Rev. Proc. 2018-58, § 17.02(1) |
| 2. Length | Postponement by 120 days or to the last day of the general disaster extension period authorized in announcing relief for the disaster, whichever is later. | § 17.02(1) |
| 3. Ceilings | The postponement may not extend beyond the due date, including extensions, of the return for the year of the transfer, or beyond one year. | § 17.02(1) |
| 4. Timing of the transfer | The relinquished property, or in a parking transaction the qualified indicia of ownership, must have been transferred on or before the date of the disaster. | § 17.02(2)(a) |
| 5. Eligibility | The transferor must be an affected taxpayer or have difficulty meeting the deadline because of the disaster for a listed reason: the location of either property, or of the principal place of business of a party to the transaction, in the covered disaster area; the death, injury, or disappearance of a party or of an employee involved in the transaction; the destruction, damage, or loss of an exchange document or relevant land record; a lender's decision not to fund because of the disaster, or its refusal because hazard insurance is unavailable; or a title insurer's inability to provide the necessary policy. | § 17.02(2)(b) |
| 6. Damaged identified property | The postponement also reaches the last day of an identification period that fell before the date of the disaster, if identified replacement property is substantially damaged by the disaster. | § 17.03 |
| 7. Limitation | A taxpayer who qualifies on a ground other than being an affected taxpayer is not treated as an affected taxpayer for other acts. | § 17.04 |
Nothing is filed to claim the postponement, but the taxpayer must actually qualify, and the ground should be documented when it arises (26.4). The ceiling in step 3 is a further reason to extend the return for a fourth-quarter relinquishment.
F.5 Reverse exchange under Revenue Procedure 2000-37
The periods run from the transfer of qualified indicia of ownership to the exchange accommodation titleholder, not from a sale. In the common exchange-last structure it is the relinquished property that must be identified (30.2, 30.4).
| Time | Requirement | Authority |
|---|---|---|
| Day zero | The titleholder, which is not the taxpayer or a disqualified person, acquires qualified indicia of ownership and holds them until the property is transferred at the end of the arrangement. | Rev. Proc. 2000-37, § 4.02(1) |
| Day zero | It is the taxpayer's bona fide intent that the property represent replacement property or relinquished property in an exchange intended to qualify under section 1031. | § 4.02(2) |
| Within five business days | The taxpayer and the titleholder enter into a written qualified exchange accommodation agreement. | § 4.02(3) |
| Within 45 days | The relinquished property is properly identified, in a manner consistent with the principles of Treas. Reg. § 1.1031(k)-1(c), and alternative and multiple properties may be identified. | § 4.02(4) |
| Within 180 days | The property is transferred to the taxpayer as replacement property, directly or through a qualified intermediary, or to a person who is not the taxpayer or a disqualified person as relinquished property. | § 4.02(5) |
| Throughout | The combined period during which the relinquished property and the replacement property are held in the arrangement does not exceed 180 days. | § 4.02(6) |
| Up to 185 days | Agreements for the purchase or sale of the property between the taxpayer and the titleholder, including puts and calls at fixed or formula prices, are permitted for a period not in excess of 185 days from the titleholder's acquisition. | § 4.03(6) |
| 180 days before day zero | The safe harbor does not apply to replacement property the taxpayer owned within the 180-day period ending on the date qualified indicia of ownership are transferred to the titleholder. | § 4.05, added by Rev. Proc. 2004-51 |
F.6 Related-party exchanges under section 1031(f)
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| Step | Rule | Authority | Discussed at |
|---|---|---|---|
| 1 | Find the date of the last transfer that was part of the exchange. The related-party period runs from the last transfer, not, as the identification and exchange periods do, from the earliest. | I.R.C. § 1031(f)(1)(C) | 40.3 |
| 2 | Find the date two years after that date. A disposition of the property by the related person, or of the like-kind property received by the taxpayer, before that date defeats nonrecognition, and the gain or loss is taken into account as of the date of the disposition. | I.R.C. § 1031(f)(1) | 40.3, 40.4 |
| 3 | Extend the period by any time during which the holder's risk of loss was substantially diminished by a put, another person's right to acquire the property, or a short sale or other transaction. | I.R.C. § 1031(g) | 40.3 |
| 4 | Disregard a disposition after the death of the taxpayer or the related person; a disposition in a compulsory or involuntary conversion, if the exchange occurred before the threat or imminence of the conversion; and a disposition where it is established to the satisfaction of the Secretary that neither the exchange nor the disposition had tax avoidance as one of its principal purposes. | I.R.C. § 1031(f)(2) | 40.5 |
| 5 | Complete Part II of Form 8824 for each of the two years following the year of the exchange. | Instructions for Form 8824; Form 8824, Part II | 40.3 |
| 6 | Test any exchange that is part of a transaction, or series of transactions, structured to avoid the purposes of subsection (f), including an exchange through an intermediary for property formerly owned by a related person. | I.R.C. § 1031(f)(4); Rev. Rul. 2002-83 | Chapter 41 |
Illustration. If the last transfer in a related-party exchange occurs on June 15, 2026, a disposition before June 15, 2028, is within the rule. If the related person grants a prospective buyer an option that is outstanding for 90 days during that period, the period is suspended for those 90 days, and the date moves to September 13, 2028.
F.7 Other recurring periods
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| Period | What it governs | Authority | Discussed at |
|---|---|---|---|
| The two years ending on the date of the transfer of the first relinquished property | A person who acted as the taxpayer's employee, attorney, accountant, investment banker or broker, or real estate agent or broker during this period is a disqualified person, disregarding services with respect to section 1031 exchanges and routine financial, title insurance, escrow, or trust services by a financial institution, title insurance company, or escrow company. | Treas. Reg. § 1.1031(k)-1(k)(2) | 28.1 |
| After the end of the identification period | An exchange agreement may give a taxpayer who has identified no replacement property rights to the funds. A taxpayer who has identified property may be given rights only upon receipt of all the replacement property to which the taxpayer is entitled, or upon a material and substantial contingency occurring after the end of the identification period. | Treas. Reg. § 1.1031(k)-1(g)(6)(ii), (iii) | 27.6, 39.5 |
| The end of the exchange period, for property to be produced | Replacement property still under construction when received is substantially the same as identified only if it would have been had production been completed, and only to the extent it is real property under local law. | Treas. Reg. § 1.1031(k)-1(e)(3)(iii) | 31.3 |
| Straddle of two taxable years | With a qualified intermediary, qualified escrow account, or qualified trust and a bona fide intent to exchange, whether the taxpayer has received a payment for installment reporting purposes is determined as if the intermediary is not the taxpayer's agent, until the earlier of the time the taxpayer has an immediate ability or unrestricted right to the funds or the end of the exchange period. | Treas. Reg. § 1.1031(k)-1(j)(2) | 39.5, 44.1, 44.2 |
| Five years beginning with the acquisition of replacement property | The section 121 exclusion does not apply to a sale or exchange of property acquired in an exchange in which gain was not recognized in whole or in part under section 1031(a) or (b), by the taxpayer or by a person whose basis is determined by reference to the taxpayer's basis. | I.R.C. § 121(d)(10) | 43.3 |
| Twenty-four months before or after an exchange of a dwelling unit | For the safe harbor, the unit is owned for 24 months immediately before the exchange, for relinquished property, or immediately after it, for replacement property. In each of the two 12-month periods, the unit is rented to another person at a fair rental for 14 days or more, and personal use does not exceed the greater of 14 days or 10 percent of the days it is rented at a fair rental. | Rev. Proc. 2008-16, § 4.02 | 43.5 |
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