Cash out refi prior to 1031?
I have a farm I would like to sell.
It is an investment property with cash rent.
I would like to “exchange” it for a single family rental but want to take cash out.
2012 purchase = $148,000
Value = $260,000
Current loan balance = $85,000
70% LTV refi = $182,000
Cash out = $97,000
Sell for $260,000
Pay off $182,000
Equity for new purchase = $78,000
1031 into a new $300,000 SFR
(Greater purchase price than sale price)
$78,000 down payment
(All proceeds toward new purchase)
Successfully avoid (legally) Cap Gains tax on $112,000
Successfully cash out $97,000 equity
Is this all good, correct, legal, logical, etc?
Comments, confirmation/denial, advise requested.
Thank you