See your savings in 60 seconds.
Federal capital-gains tax, state tax, depletion recapture, and a ten-year wealth delta — for your specific numbers. Transparent math, no contact info, no email gate. Move the sliders and watch the output update live.
The sale price of the property you’re relinquishing in the exchange.
Your tax basis. For inherited interests, this is typically fair-market value at the decedent's date of death (1014 stepped-up basis).
Cumulative depletion claimed if you're relinquishing an oil & gas interest. Recaptured at ordinary income rates. Set to $0 for real-estate, inherited, or non-producing interests.
Annual cash yield on your replacement property. Royalties vary; NNN runs 5–7%, DSTs 4–6%, farmland 1–4%.
Most 1031 exchangers land at 20% (or 23.8% with NIIT for AGI above $200K single / $250K joint). Confirm with your CPA.
That's the cash that stays in your pocket and gets reinvested into the replacement property instead of going to the IRS and the state.
- Capital gain
- $0
- Federal capital-gains tax (deferred)
- $0
- State capital-gains tax (deferred)
- $0
- Depletion recapture (ordinary income)
- $0
- Total deferred
- $0
Wealth in 10 years.
10-year horizonMethodology and assumptions.
How is the capital gain calculated?
Sale price minus cost basis. For inherited interests, basis is typically fair-market value at the decedent's date of death under 1014 (stepped-up basis), which often eliminates capital-gains exposure entirely. For purchased interests, basis is what you originally paid plus any capitalized improvements.
How is depletion recapture handled?
Depletion you've claimed against the interest (percentage depletion at 15% or cost depletion) is recaptured at ordinary income rates at sale. We assume a 37% marginal rate for the recapture portion. Whether the 1031 exchange defers the recapture is fact-specific and requires CPA review. We show it deferred for the optimistic case.
What are the state tax rates based on?
Most states tax capital gains as ordinary income. The dropdown shows top marginal rates for major mineral-producing states as of 2026. If your state isn't listed, "Generic 5%" approximates most non-zero state rates. Texas, Florida, Nevada, Wyoming, South Dakota, Tennessee, Alaska, Washington, and New Hampshire have no state income tax.
How is the 10-year wealth delta calculated?
The "sell outright" line assumes you pay the tax now and reinvest the after-tax proceeds at the replacement yield, compounding annually for 10 years. The "1031 exchange" line assumes you reinvest the full pre-tax proceeds at the same yield. The difference is the delta. Real-world results depend on the actual yield, the tax basis of the replacement property, and your eventual exit strategy.
What about closing costs, QI fees, and other transaction costs?
Not modeled here. Peregrine's coordination is included in the price paid for your interest. The registered Qualified Intermediary partner charges a flat fee (typically $1,000–$3,000) that's small relative to the deferred amounts on most exchanges. Real-estate closing costs on the replacement vary by property type.
About the math behind these numbers.
How the calculator works and what to do with the result. Fifteen more on the full FAQ page.
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Are these numbers exact?
No — they are a transparent estimate. Federal capital-gains and depletion-recapture math is computed from the rates you can see in the inline source. State capital-gains rates are baseline figures. Your CPA should sign off on the specific numbers before you make any decision. -
How are state capital-gains rates handled?
The calculator applies your selected state's top marginal capital-gains rate as a flat add-on to the federal rate. States without an income tax (Texas, Wyoming, etc.) show 0%. Income-tax states use a representative top rate — your actual rate depends on bracket and filing status. Verify with your CPA. -
What is "depletion recapture" and why is it on the result?
If you have been receiving royalty income, the IRS allowed you a percentage-depletion deduction (typically 15%) each year against that income. When you sell, the cumulative depletion taken is "recaptured" as ordinary income, taxed at your marginal rate rather than the lower capital-gains rate. A 1031 exchange defers recapture along with the capital gain. -
Can I get a personalized analysis?
Yes. Tell us about your exchange and a partner will model your specific numbers and show you a royalty portfolio that fits — free, no obligation, ready to take to your CPA.