While I recognize 1031 exchanges can be complex, this doesn't answer my question. My question is, "Does the IRS textually require that the replacement property have the same or higher purchase price as the sale price of the relinquished property?" I know it's possible to play it safe by paying the same or higher price for a replacement property as the sale price of the relinquished property. But will it ALSO fulfill 1031 requirements to (a) spend all of the funds in the 1031 exchange account, not touching any of the proceeds...and (b) acquire at least as much mortgage and the mortgage left behind? One can fulfill both of these requirements WITHOUT purchasing a replacement of exactly the same price as the previous property was sold for. The difference is due to the fact that NOT ALL THE PROCEEDS of the sale go into the 1031 exchange account because there are significant sale costs like commission, etc. So the question is whether meeting both conditions (a) and (b) is sufficient....or is there some place that the IRS code SPECIFICALLY says the replacement property must have the same or higher price (or "market value) as the property sold? Thanks.
