1031 Exchange To Payoff First Mortgage
I would like to know if i take out a loan on my house to purchase a forclosure property will i be able to 1031 funds to payoff the original mortgage note when the property is sold? Shawn
Not if you want the entire exchange to be tax free. Any money from the relinquished property sale will be taxed.
Better to do a cash out refinance on the replacement propertty after the exchange has closed to get the cash to pay off the loan on your primary residence.