1031 boot - Posted by Philip

Posted by Dave T on February 17, 2002 at 23:33:35:

This is tax planning the IRS may not like, but refinancing immediately before entering a 1031 exchange is permitted. Refinancing your replacement property after the exchange is also permitted.

Refinancing DURING the exchange, if you receive the cash (constructive receipt), is not a safe option.

1031 boot - Posted by Philip

Posted by Philip on February 17, 2002 at 18:14:10:

I planned on refinancing a commercial building that I have owned for 13 years. The original mortgage was
$ 825,000 and a second mortgage of $ 250,000. They are down to a combined total of $ 740,000. I wanted to refi to a lower rate and pull of an extra $ 200,000. While this refi was going on the primary tenant offered to buy the property at 2.1mm.
I have already paid for closing costs. I haven’t closed on he new mortgage yet. How long before I can sell the property without it (the extra $ 200K) looking like boot to the IRS?