If i was to sell for example a motel which I bought for 370,000 and now I am selling it for 1 million and want to do a property exchange, how much would I have to invest? how much would I be able to keep? And when would I have to pay taxes and on what? Any help would be great thanks.
I assume you are talking about a 1031 tax defferred exchange.
The short answer is you have to invest all of the proceeds of the selling of the first properties into new properties. You tax bill be deferred until realize the gain. If you take money off the closing table it be taxed (most likely cap gains).
You should go and buy a book on this topic and/or consult a reutable title company; it is simple in principle, but has many complex inter-workings.
My understanding of 1031’s is that you must elect the 1031 at the time of sale, then EVERY PENNY of proceeds from the sale are held in escrow. You must identify target purchase properties within (I think) 45 days after the sale, although they don’t have to be the actual properties that you purchase.
When you do make your purchases (you can buy 1 property or multiple, so long as they are all for investment purposes) to complete the 1031, the funds are taken from escrow, then you can pull any remaining funds out as profit (capital gains taxes apply here).
My understanding of 1031's is that you must elect the 1031 at the time of sale, then EVERY PENNY of proceeds from the sale are held in escrow. You must identify target purchase properties within (I think) 45 days after the sale, although they don't have to be the actual properties that you purchase.
joel-investor,
If you don’t purchase at least one of the identified properties, the exchange fails.