How much capital gains tax can be deferred on a Montana commercial property sale?

Under IRC Section 1031, a commercial real estate investor in Montana selling a $2.5M asset with a $650k basis can defer approximately $569,450 in combined federal capital gains, Section 1250 depreciation recapture, NIIT, and Montana state taxes (22.78% total tax drag).

Does Montana enforce a clawback rule on out-of-state 1031 exchanges?

Yes, Montana enforces statutory clawback rules requiring annual reporting of deferred gain on out-of-state replacement properties.

MT Real Estate Tax Intelligence

Montana Section 1031 Exchange & Capital Gains Deferral Calculator

Institutional tax deferral model for Montana commercial property owners factoring federal Section 1250 recapture and Montana state tax rates.

Montana Commercial Property Parameters

Calculate capital gains deferral for commercial real estate in Montana.

Relinquished Property Sale Price ($)

Adjusted Cost Basis ($)

Accumulated Depreciation ($)

Mandatory Clawback Notice: Montana (Form 2 Schedule IV)

Montana mandates annual tracking of deferred gains when exchanging into out-of-state property. Taxpayers must submit Form 2 Schedule IV annually to certify the replacement asset until final liquidation.

Montana Tax Savings Breakdown

Total Tax Deferred with 1031

$569,450

Tax Drag Avoided: 22.78% of Gross Sale

Federal Taxes Deferred

$460,300

Montana State Tax Deferred

$109,150

Statutory Compliance Deadlines

45 Days: Identify replacement property in writing.
180 Days: Acquire replacement property and complete exchange.

Montana Commercial Asset Sale Cohorts (2026-2027 Projections)

Asset Sale Price	Federal Tax Avoided	Montana State Tax Avoided	Total Tax Deferred	Effective Rate
$1,000,000	$175,600	$41,300	$216,900	21.69%
$2,500,000	$439,000	$103,250	$542,250	21.69%
$5,000,000	$878,000	$206,500	$1,084,500	21.69%
$10,000,000	$1,756,000	$413,000	$2,169,000	21.69%

Montana Section 1031 Valuation & Boot Permutations

Model exchange deferral scenarios across commercial property valuations, adjusted cost bases, and cash boot realization.

$1.0M Commercial Asset

$1M Sale / $300k Basis →

$2.5M Institutional Asset

$2.5M Sale / $650k Basis →

$5.0M Enterprise Asset

$5M Sale / $1.2M Basis →

Partial Boot Realization

$250k Cash Boot Taken →

Montana Tax Planning & Commercial Entity Suite

Interconnected statutory models connecting Montana commercial real estate exchanges, individual income tax brackets, and Section 179 equipment deductions.

Individual & Household Tax Projections

Montana 2027 Tax Brackets Calculator →

Model Montana state income tax (5.9% top rate) alongside post-TCJA federal rate reversion.

Commercial Equipment & Vehicle Expensing

Montana Section 179 Deduction Limits →

Evaluate first-year commercial equipment deductions and heavy vehicle write-offs under IRC Section 179 for Montana businesses.

Neighboring State 1031 Exchange Calculators

268.6 miles away

Idaho (ID)

State Cap Gains: 5.7%

326.6 miles away

Wyoming (WY)

State Cap Gains: 0.0% (No Tax)

473.2 miles away

Utah (UT)

State Cap Gains: 4.65%

502.0 miles away

North Dakota (ND)

State Cap Gains: 2.5%

Qualified Intermediary Partners for Montana

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Reverse & Improvement Specialist

The Exeter 1031 Exchange

Nationwide qualified intermediary, exchange accommodation titleholder, and reverse exchange specialist.

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