When estimating the net selling price, do I get to take my initial investment into consideration? What about expenses or improvements made before selling? Can I pay myself back for those items?

When estimating the net selling price, do I get to take my initial investment into consideration? What about expenses or improvements made before selling? Can I pay myself back for those items?

To have a fully tax-deferred exchange, the taxpayer must trade up or equal both value and equity from the relinquished property to the replacement property. Taxes will occur on the greater of these values only to the extent of the realized gain from the exchange. If you take any cash out at closing, it is categorized as the taxable boot. This is where a good tax advisor is helpful.

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