Can I use more debt on a 1031 exchange?

[Brett Jenkins]

I have received conflicting information on this so I thought I would ask here to share with others who may be interested in finding the answer.

I have a property I bought for 800k. I am selling for 1 million (after closing costs and comissions) and the note is now 600k.

I was wondering if I could I could buy a property with 200k down and 1 million total value and pocket the other 200k tax free. 

Could I also break it down and buy two properties at 500k 80% ltv?

In other words, can I increase the debt on my 1031 exchange and what are the tax consequences of the money that remains?

[Wayne Brooks]

No.  You must meet 2 minimums; ALL the cash received from the sale must be reinvested AND the replacement property must be at least the same price (net of closing costs).  Any cash not reinvested is taxed, and causes ALL recapture taxes to be triggered.