1031 Improvement Exchange

[Ben S.]

So if I currently have a rental property that I purchased for $65k and spent $50k improving and I sell it a it a year after buying it for $250k in order to buy a rental property that costs $100k and needs $150k in improvements to then be worth about $400k, does all that work with a 1031 exchange?

Is the higher value rule the sale price of the current property compared to final appraised value of the new property? Or is just based on sale price and improvement cost of the new property?

I know I need a QI and have to do everything within the time requirements, just not sure when improvements are involved what numbers I'm using to make sure I defer 100% of the taxes.

Thanks!