1031 Exchange from SFR to (1)Raw Land & (1)SFR (STR)

[Chris Watson]

So I have a SFR I have been renting for 9 yrs with $100K equity in Florida. I am prepping to list it for sale next week. I am considering doing a 1031 exchange for two properties (1) a SFR ($230Kish) I will turn to a shor term rental (STR) and (2) about 27 acres ($200K) of raw timber land I would subdivide and develop into more SFR-STRs within the next three years. The question I have is this:

With about $70K in tax depreciation, can I put all the deferment from the property being sold on the SFR being purchased since it has a building and still use the remaining proceeds from the sale in the 1031 Exchange to buy the land?

Spelled out more clearly:

1. Sell SFR with $100K equity

2.  Utilize 1031 Exchange 

3. Purchase unit 1 (SFR) at $230K with $46K down from 1031 Exchange financing the remainder. Apply 100% of the depreciation to this unit from sold home ($70K).

4.  Purchase Land at $200K utilizing the remaing $54K from the 1031 Exchange.  No depreciation applied from prior sale.

(The properties I would be purchasing are from different owners.) 

I am appreciate and look foward to your input.

Chris