1031 Like Kind Advice/Help

[Marty G.]

I have owned a property for about 4 years.  It is not my primary residence and have used it as a vacation property.  It's located in FL and the market price for the house is estimated to be $150-175k over what I paid for it 4 years ago.  I'm looking to sell as I don't want to manage (or hire a manager) any longer and be a long distance manager/investor (I'm in CT).  Instead, I'd like to sell this property and take the proceeds and roll that into a rental that's closer to me and use whatever tax advantages I can to assist me.

I'm confused with how the 1031 works and was hoping someone could explain to me how to "use" it.  My current property (that I'm considering selling) is not yet on the market and while there are other houses closer to me that I'd consider buying, I don't know how to have the 1031 work for me so not really sure how to navigate this "exchange".

I've heard so many things (and read so many variations) of how the 1031 applies, I'd like to know how it really works, specifically:

- If I sell my rental house, do I have to identify another house to purchase before I list this one?
- If not, how long do I have to identify the next property to purchase and what happens if that purchase falls through?
- If I purchase the next property, do I base the "taxable" portion on the GAIN of the house (i.e. the 150-175k in profit) or is it based on the total cost of the house?
- Lastly, I've heard that, after the sale, the money must be "untouchable" before purchasing the new property.  Is this just done via a separate bank account or does this have to be done somehow with an escrow service?

Thanks in advance... 1031 has really confused me, so appreciate the help!