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In a 1031 exchange for a residental rental bldg.does the new one have to be the exact amt as was sold or how much of a cushion do you have to qualify for the 1031

corinne91
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TaxMonkey
Level 8

If it is not the same or more expensive then there will be taxable boot on the transaction.  You can do a 1031 exchange for like kind assets regardless of price, but the less gain you defer the less that its worth the hassle.  Most people try to defer all of the gain.

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TaxMonkey
Level 8

If it is not the same or more expensive then there will be taxable boot on the transaction.  You can do a 1031 exchange for like kind assets regardless of price, but the less gain you defer the less that its worth the hassle.  Most people try to defer all of the gain.

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