So if you spend all of the money you'll avoid any taxable boot.Any money you have left over after your purchases will be taxable boot.

You can deduct that withholding off your Canadian taxes, so as long as your taxable rate is about 15%, there is not impact on your taxes. 

•The portion of the duplex used as a rental qualifies as Relinquished Property, the portion occupied as their Primary Residence does not. • The sale of the Primary Residence is a taxable event and reported on their tax return as such. • Gain on the sale of the Primary Residence qualifies for exclusion under §121—up to a half-million dollars for the married couple. • The proceeds from the sale of the rental portion of the duplex qualify as Relinquished Property under §1031 and since they are trading-up, no gain will be recognized at the time of the sale. • The clients can use their full before-tax equity in the rental portion as part of their payment towards the apartment complex they are buying. • The clients can use all or part of the cash proceeds from the sale of the portion of the duplex qualifying for §121 treatment.

But I have to start somewhere and hopefully the next deal will be 'sweeter' :) MonthlyAnnualYield Gross Rent$700.00 $8,400.00 Insurance ($50.00)($600.00)Taxes ($16.67)($200.00)Repairs ($70.00)($840.00)Management ($56.00)($672.00)Vacancy ($70.00)($840.00)Net Income$437.33 $5,248.00 8.26%Deprectnon 58k($175.76)($2,109.09)3.32%Taxable Income$261.58 $3,138.91 4.94%

Nick Redding Nick, I have done a few with no change to my taxable value.

As a seller, financing the deal yourself is a good tax choice, especially for 1031 considerations.The 1st TD is in the sellers name as security.Title goes to the buyer, as do property taxes and insurancePayments operate like an Installment Sale - - cash is realized upon receipt, making taxable income but also reducing YE gross - - less taxes. 

If you financing it over time then the interest you receive would likely be taxable but the amount of the payment applied to the principal would not be taxable. 

Luckily I have continued to do my tax returns even though the income is not taxable.

Good advice is worth paying for and you don't want to screw this up otherwise there could be taxable gifts going back and forth, or you could be giving ownership of an asset where you do not intend to give ownership. 

IRA plans have no exemption, so UDFI will be taxable even for real property debt.When a tax-exempt entity engages in a trade or business, then UBTI applies (Unrelated Business Taxable Income).