1031 Exchange Proceeds with Existing Mortgage

[Mike Huang]

Hi everyone,

So I was wondering what you would do when you want to do a 1031 exchange but have a mortgage on your existing property.

Say you're selling a house worth 500k but there's still a remaining mortgage of 300k. 

When you sell it for the 1031 exchange, do you reinvest the 500k or the 200k net after mortgage? If the answer is the 500k, then how do you come up with the difference to reinvest?