Can I Use 1031 Exchange Proceeds to Pay Off Business Debt?

It’s a common question—but one with a complicated answer. When it comes to 1031 exchanges, not all debt is created equal. Whether you’re dealing with mortgage debt tied to the relinquished property or unrelated business loans, how and when that liability is paid can have significant tax implications.

Understanding debt netting principles, the difference between cash boot, mortgage boot, and  the difference between eligible and ineligible debt is crucial.

Thinking about using exchange proceeds to pay off a loan not related to the real estate acquisition? You’ll want to read this first.
Read our article here and get clarity before you close.