Discussion:1031 - can B guarantee payment of A's mortgage in like-kind exchange?
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Discussion Forum Index --> Tax Questions --> 1031 - can B guarantee payment of A's mortgage in like-kind exchange?
| 16 August 2007 | |
| A owns property encumbered by a $700k mortgage.
A wants to do a 1031 like-kind exchange whereby A will acquire a 75% interest in replacement property, the entire 100% of which is subject to a mortgage guaranteeing payment of $1,200,000. B will acquire the remaining 25% of the replacement property. A will sign a note for 75% of the mortgage amount and B will guarantee payment (not co-sign) of A’s 75%. A will do the same for B’s 25%. Will this run afoul of the debt-for-debt requirement? A will owe more after the exchange, but does B guaranteeing payment wreck any havoc with nonrecognition? | |
| 16 August 2007 | |
| Why doesn't the current owner pay off the mtge at the closing form the proceeds? | |
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