Buying Duplex, Selling 1 Unit

[Puri Indah]

Hello BP'ers,

I have a few questions and hoping you could give me some of the answers, if not all:

Scenario:Selling a rental property for $1,200,000 and thinking of 1031 exchange it to a duplex at $2,500,000.


Questions:

1. How do I apply the capital gain of the sold property: Do I have to apply to both units, or just one?

2. How do I assign prices for each unit? Is it up to me to assign Unit A for $2,000,000 and Unit B for $500,000?

3. If at some point I decide to sell Unit A and could only get $1,000,000 for the sale, does it mean I can claim a loss of $1,000,000?

4. Using Scenario 3 above, what would be the downside of assigning a very low price to unit B?

Thank you in advance for your help!

Puri