Pay Down Mortgage of Replacement Property In 1031
I'm in the middle of a 1031 Exchange. I purchased one replacement property and have cash left over with the 1031 intermediary. I paid for it with a new mortgage and cash.
With remaining cash with my 1031 intermediary, may I pay down further the replacement property I purchased?
Why not use all your 1031 funds for the replacement...? You can do a cash out once it's done
I would like to use all the cash, I already closed on the replacement property. I am still during the 180 days.
May I pay down the replacement property further- just want to be sure that I follow the 1031 rules without a boot?
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Rick T. Bummer. Sorry that ship has sailed. You could have used all of the proceeds in that purchase and taken less mortgage. But now that title has conveyed you cannot put 1031 funds into property you already own. I'm surprised your intermediary didn't warn you of this.
You do have another option - you could purchase another property using that cash if you're still in your 45 day period or if you have another property on your 45 day list. But other than that they money left in your exchange account is going to be boot and taxable.