Learn through the numbers
Four hypothetical exchanges showing where the money goes, which gain is recognized, and how deferred gain changes replacement-property basis.
Example 1
A higher purchase price can support full deferral, but funding and exchange qualification matter too. This example tracks every dollar without confusing equity with gain.
Follow the calculationExample 2
Taking some cash does not necessarily invalidate the entire exchange. In this example, part of the gain is recognized and the remainder is deferred.
Follow the calculationExample 3
You can reinvest every dollar held by the QI and still have taxable boot. Here, a reduction in debt is not offset by additional cash.
Follow the calculationExample 4
A replacement mortgage does not have to match the old mortgage dollar for dollar. This example uses outside cash instead of some new borrowing.
Follow the calculationPublished by The 1031 Source. AI-assisted educational examples, not actual client transactions or professionally reviewed advice. Each example discloses sources, source-check date, assumptions, and a correction pathway. Legal disclaimer.