1031 exchange tax estimate

Considering 1031. Property in CA. Paid 129,000; depreciation  35,000; mortgage payoff 95,000 taken from selling price; sale commission  25,000; Selling 485,000. Buying Property in TN 350,000; no mortgage. 1031  ok? Fed tax amount owed?

Dear R:  Thank you for contacting us.  The tax in your example is estimated as follows: $485K- $25K= $460 net sale price.  $460K-$350K= $110K trade down in value. Of that the first $35K will be recaptured depreciation taxed at 25% ($8,750) and the remaining  $75K will be long term cap. gain taxed at 15% ($11,250). Finally the entire $110K will also be taxed at 9.3% California State tax ($10,230).  TOTAL ESTIMATED TAX YOUR EXAMPLE= $30,230.    The exchange still provides significant tax savings to you.  If you want to defer all taxes you will have to buy a second property of at least $110K.  I hope we can help you with your 1031x.  Sincerely,

Steve Hickox
Attorney / President