The advice rendered is generally that your 1031 exchange has failed and will not qualify for tax deferred treatment; in short, it’s taxable.

If it closes without a "QI" it is taxable and there is no way to fix it.

You can pull cash out, but it will be taxable.

I maxed out my deductions until I couldn’t find any other way to lower my taxable income.

Just looking at that it doesn't look like it makes a lot of sense however I don't currently have any real tax deductions so looking at an amortization schedule I can reduce my taxable income by over 21k the first year which should equate to an additional 6k in my pocket, obviously this number will go down over time.

I can then reduce my taxable income by $21,800/year.

There is some logic to this law change because most people under the prior rules didn't recognize a taxable gain because they rolled it over into another residence," says Trinz.

Now the problem is that, this money is considered taxable by the IRS.

And if depriciable site improvements are $600K, you'll have a nice $18K+ taxable loss on about $8K positive cash flow.

The deductions allowable are those items allowed as deductions by chapter 1 of the Code which are directly connected with the debt-financed property or income therefrom (including the dividends received deductions allowed by IRC 243, 244, and 245) except that: The allowable deductions are subject to the modifications provided by IRC 512(b) on computation of the unrelated business taxable income, and The depreciation deduction under IRC 167 is computed only by use of the straight-line method.