1031 Exchange Funds for Subject-To

[Noah Laker]

I (broker) have a client who has about $80,000 in 1031 exchange funds and our 45 day identification window expires on Monday.

Just so happens that I have access to a "subject-to" deal which will require approximately $60k to close between paying off the seller, closing costs, and paying me. 

Everything will be recorded through title.

Question: Can we use his 1031 exchange funds to get this done? Will the IRS recognize this situation as compliant? 

He's buying an investment property and there will be a transfer of title. Good, right?