This is our first experience doing a 1031 exchange.  

They are then exchanging into more passive investments in other states for a 7.5 to 8 cap.Another way if someone didn't want to 1031 is to refi out up to 75% of their current property and then use those funds to invest some more.If you straight sale versus 1031 or refi and hold you will get hit with capital gains, possible state taxes, excise tax, roughly 3.8% medicare tax, depreciation recapture etc.

When I opted to take the half off in exchange for making the deposit non-refundable, did I waive the option for that deposit to be used against any damages, or is that a mistake by my landlord which they should be responsible for? 

TO me it's just an exchange of ideas until the best idea prevails.

Also, I could delay paying the recapture tax by doing a 1031 exchange. 

Write the contract up for even $100 monetary exchange.

I currently live in Korea which is an eleven hour time difference, so I would rather exchange emails than phone calls.Thank you for any input!

Do not exchange work in lieu of paying rent (all or part).

Now if I wander off into Tax issues like a 1031 Exchange, I only have an introductory background in the subject.

Check it out, PM me if you'd like to exchange analyses.