My first comment here is that I just found an error in my commercial newsletter I sent out the other day. Here is what I wrote:
There are two points that need to be closely adhered to in order to qualify for a 1031 exchange. First, the total purchase price of the new investment property must be equal to or greater than the property being purchased. Second, all the equity received from the initial sale must be used to purchase the replacement property. If there is any shortfall in the purchase price of the similar property, the investor will be liable for any capital gains taxes associated with the sale.
Now the first point is correct with the exception that the last word in that sentence should be "sold" not "purchased". Please forgive this error as it can be pretty critical! To read the entire newsletter please read Business Success Today at http://www.sarealtywatch.com/.
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