Posted by JHyre in Ohio on March 11, 2002 at 10:43:41:
The personal loan is not secured on the property, so any cash received, whether or not used to pay the loan off, would be taxable boot. Do the exchange and get a loan on the new property, including enough to pay off your personal loan…that would be nontaxable. Make sure and track the use of the loan proceeds so that you can deduct the interest.
John Hyre
1031 and “Boot” - Posted by Rene Perrin
Posted by Rene Perrin on March 09, 2002 at 12:22:05:
I bought a property in October that I was planning on keeping as a rental. When I closed I used a personal loan for the downpayment for which no purchase money mortgage was recorded or shown on the HUD 1. I got a great offer that I accepted that where I would like to roll my profits into another property and pay off the personal loan.
Can I do this and not have the portion used to pay off the personal loan be considered as “boot?”
Thanks-
Rene