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[[If I sell the rental I have now for a profit of x amt of dollars , and i do a tax free
exchange can I defere the gain by buying another place with the gain or does it
have to be equal to or more than the sale price ]]

First of all, don't get caught in the trap that an exchange is a sale and a subsequent purchase. It's much more complicated than that. In addition, as you note, the new property has some restrictions attached to it. And you can't pull out any cash on the deal either...and keep that cash tax free.

If you are interested in an exchange, you MUST at least read IRS Publication 544 at the IRS web site. It'll give you some good information that you can use as a minimum. And, I would certainly recommend that you DO NOT try the exchange on a "do it yourself" basis. You really need the assistance of a qualified tax pro and/or attorney and a real estate broker with experience in exchanges. It's a real maze. One wrong step and you'll find yourself in the middle of a problem.

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