2 simple questions on 1031 exchange

[Justin Summers]

I sold a rental for $430,000 and  deducting commission , closing help and transfer taxes were about $30k So, I am at $400,000 after deducting expenses of the sale.

Question 1-   Do I need to buy $400k in total replacement properties or $430k? (I'm going to assuming it's $400k for my remaining questions)

I am nearing the end of my 45 period to identify replacement properties.  I have already purchased and closed on 1 property for $160k. I had to post the deposit of $15,000 of my own money (not from my QI) and while I realize I could have gotten credit back on the closing statement for that deposit I did not. So, the QI sent $145k to close on the $160k property. 

Question 2-   Does this property count as $145k toward my $400k replacement amount or $160k? 

I'm having trouble finding properties to buy so I am going to use to 200% rule to identify property I may purchase. over the next few months. ( Again assuming the answer to you first question is $400k) I have $800k worth of property I can identify. 

Question 3- Does this first property I have already closed on come off the the $800k even though I have already closed?  Meaning I now only have $740k worth of properties I am allowed to identify? Or since I already closed to I still get to identify $800k worth of property? 

Sorry that was 3 questions!!   Thanks for your help in advance

[Dave Foster]

@Justin Summers, I'm reminded of the old example of the odds of a coin landing heads or tails.  What are the odds of a flip landing heads?  50%.  After 1000 flips in a row that land up heads what are the odds of it landing heads - 50%.  QI s are human (thank you very much please tell my kids that ;). But it's up to them to be your guide.  Asking the same question from a few thousand other hoomans doesn't increase your odds of a correct answer as @Jordan Moorhead said.  But that being said - from another hooman and QI...

1. Your QI is right - the responsibility to defer all tax is two fold - you must purchase at least as much as your net sale ($400K) and you must use all of your net proceeds in your purchase or purchases.

2.Your one property would count as $160k of purchase using $145K of cash.  You still have to purchase at least $240K of real estate and use up whatever cash is left if you want to defer all tax.

3. Any property you purchase has to be on your 45 day list.  If you close early then by default it goes on your list.  So if you want to use the 200% rule you must keep the rest of your list to no more than $640K (unless you're planning on purchasing all of them).

But beware, simply identifying properties really doesn't help you a lot in this market.  I'm telling clients to not think of this as an identification period.  Think of it as a contract period.  If you're not under contract for your replacement property before day 45 your odds of getting it are slim.  And by the time you negotiate and lose that one, your odds of getting any of the others is almost 0.  They'll all be gone.

Don't lose heart.  But don't think about identification as much as you need to focus on contract!