Your tenant is only allowed to withhold rent when specific requirements are met, and they must do so in a very precise manner.

I’m using funds from a 1031 exchange for the deposit.Can anyone provide insights or guide me on how to refine my underwriting or ask the right questions to ensure my numbers are accurate and this is a solid deal?

I'd like to sell my CO property and do a 1031 Exchange for a local FL property but I've been cautioned by members in the local investment clubs about potential Relinquished Debt consequences. 

Please also direct any future correspondence to me in writing.Sincerely,Ambulance chaser (name changed to protect the guilty)Here's my response:Dear Ambulance Chaser,Our lease agreement allows you the use of the property at 123 Straight St in exchange for rent.

It's always enriching to exchange knowledge and insights with fellow professionals in the field.Best,Jim Vani

If you ever want to chat about strategies, financing options, or just exchange insights, feel free to reach out.

It will be nice to connect with other Newbie investors in the area and exchange plans and ideas.

Under IRS rules (see IRS Publication 925 on Passive Activity and At-Risk Rules), when you sell a rental property, all suspended passive losses from that property and the rest of your portfolio become deductible in the year of the sale, provided you fully dispose of the activity and it is not exchanged for another property (like in a 1031 exchange).If you have $100K in losses from your entire portfolio, those should be applied to the capital gain from the sale of the property—not just the $50K from the specific property being sold. 

Question 1) does the depreciation recapture follow thru the 1032 exchange where you still keep track 50k worth of recapture?

Since each taxing municipality has different mill rates (property tax rates) a 1031 exchange into a state or municipality within a state where the mill rate is lower can help.