@Anonymous_
"2) The debt on the replacement property is less than the debt on the relinquished property."
It's the other way around. The debt is higher on the replacement property.
In my vague understanding of these things, if both the debt on the new property and the FMV of the new property are more than those items on the relinquished property then there's no recognized gain. That's why I sort of figured the difference (downward) on the new property's FMV might cause a small gain.
I'll look at the link you've provided to see if this becomes clearer.
