Well, you no longer get the depreciation deduction.Keep in mind that in a 1031 exchange the basis from the relinquished property (or properties), called the "exchanged basis," carries forward to the replacement property (or properties). 

Anyone know if a 1031 exchange can be done with a personal residence?

I was still using the equity in my Triplex, but there wasn't an exchange of liquid cash, which made this process much more simple although it prolonged it slightly. 

For the precise rules in your state, consult the website of the state agency that handles business filings. 

He lost that property a few years ago to foreclosure.Not only that, I can also do a 1031 Exchange to much bigger, better properties, if I can identify one.

My plan being one day to do a master suite ad on to the house, then 1031 exchange the proceeds into multi units out of state.

I would recommend setting up a team:RE Lawyer/Title RE AccountantProperty ManagerMortgage Broker and/or BankerProperty (Home) Inspector / Construction Engineer ( 50 units or more)If the PM does not have an insurance agent then getting one for yourselfRealtorLitigation Attorney that specialize in EvictionsOptional but recommendedLike Kind Exchange ManagerChamber of Commerce rep ( Development Committee member)City Council memberAsset Attorney/ Accountant for if you plan on doing a private offering or syndicating funds.Hope that helps, having a team in place helps a lot for big deals. 25 k

Then to transfer and convert currency, depending on the bank it could be either expensive or really expensive... use some third party exchange company like transferwise.If it is only to receive money in the foreign country, transferwise also offers a way to receive local payment with a virtual local account number.

In exchange he will give you half the equity left over once the debt is paid off and your investment is repaid.

Easiest may be to loan her the $80k in exchange for a first mortgage and a will stating you will inherit all or portion.