Question on Exchange

Jan 28, 2017 0 Replies
8 months ago I purchased a small commercial property via a 1031 exchange. It was almost an even exchange.

I paid for the new property in all cash just to keep it simple and also because it was my first time doing a 1031 exchange. I used all the net proceeds to purchase the new property.



Now I realized that I should have used leverage and bought a larger property.



My question now is as follows:



Would I be breaking any IRS 1031 exchange rules if I got a Bank Loan on this purchased property and got about 70% equity out and invested this 70% as a down payment towards a new property?



If I would not be breaking any IRS 1031 Exchange rules, do I need to get a 1031 exchange involved for this transaction?



Thank you


Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required