Can anyone give me details on how a 1031 exchange works/ do I have to reinvest the total amout or just part of the profits.
Is exchanging less than 100% of an interest allowed?
Yes. Fractional parts are allowed.
Bruce
Howdy Islander:
The best way to learn about 1031’s is to do a google search and start reading about it from different sites. That is what I did.
Here is a little info to help answer your questions. You have to hire a third party 1031 approved exchange company to handle the exchange as well as the title company. The charge $400 plus for a simple exchange. To do 100% trade you will never see any of the money. You can do a trade where you can get some cash (boot) and you will have to pay tax on that part. You have to trade at least even in value and equity or you could have some boot also to pay tax on. If you trade for instance where your new mortgage is smaller than the one you are giving up you would pay tax on the debt reduction. You also have certain time lines you must identify an exchange property and the actually close the deal. Hope this little bit helps