Calculating tax from a partial 1031 exchange

[Rob Saunders]

I have been struggling to find out how exactly you get taxed on a partial 1031 exchange. Our scenario is we are selling a property in Washington State for $690k, our net proceeds will be around $635k as we do not have a mortgage. We have found a replacement property for $500k, which will leave us with around $135k left to invest. If we don't end up finding anything what will we be taxed on? The answers I have found range from standard income tax on the $135k to a percentage of the amount we re-invested as a capital gains tax. Looking for clarity!

Thanks in advance,

Rob