advice on my duplex, keep it to rent, or sell using 1031 exchange

[Jeanne Hagan]

Soon I will have listed my duplex for sale in Boston Mass.  House is valued at $650K and when all is said and done will walk away with $600K in cash after closing.  I want to buy another multi-family closer to where I live (25 miles north of Boston) and use the 1031 exchange to avoid the capital gains tax.  Q1.  I have located at duplex for sale I want to buy for $400K, and wonder if I should look for another smaller condo and spend the entire $600K ...OR....in order to keep some spending cash, should I just pay the capital gains tax on the $200K.  thanks, Jeanne

[Ian Kidd]

@Neil Whitney you don't have to go up in value but you pay capital gain taxes on the difference between like properties. what the OP is suggesting is to purchase two properties that would have a value greater than 650k, a 1031 doesn't have to be a 1 for 1 swap.