Partial 1031 Exchange - Taxes on the Boot

[Kenneth Dahle]

I have been looking but can't seem to find a definitive answer on this question of the tax consequences on a partial 1031 exchange.

I sold a rental property in Colorado for $397,000 and purchased (thru 1031) a rental property in North Carolina for $286,000. That worked smoothly, however, after expenses I ended up with $89,000 ("boot") in cash in my pocket.   The original price for the CO property was $95,000 and I took $30,000 in depreciation on it. This all took place thru a two person Llc partnership so that, basically, all these figures would be divided in half. Each partner earns $14,000 per year in regular income.

Questions are:

1- Will there be any Federal Tax due for each partner?
2- What will the Colorado Tax be?

Does anyone have the answer for this kind of situation.  

I appreciate it.