1031 on lower cost property

[Kevin Wasie]

Hello, I am going to complete a 1031 exchange for the first time.

I recall that I read in a book that most people do not understand the boot rule correctly, and many 1031 QI's implement it incorrectly. Specifically, the book indicated that you do not need to purchase a property that has same or higher LTV.

For instance, this book stated that you could purchase a property with lower LTV, and a lower value, as long as the equity stake is the same. This makes sense, to me, as it is a like-exchange.

However, all of the information I read online states something different. I am trying to find where this information is, and what book that was, so that I can take advantage of it/contact the author for assistant.

Here is my scenario: I purchased a property for $70k. I am now selling it for $95k. There is no loan on the property. 

I want to take the $25k gain and purchase a property for $40k (with the other $15k) from my cash funds. 

I do not want to pay tax on the $25k gain. 

Thank you.