Partial Exchange

When an exchange entails a combination of the boot with partial success of the exchange. When an exchangor receives some cash from an exchange, excluded property and/or non-like-kind property and/or any net reduction in debt (mortgage relief) on the replacement property as well as an exchange of qualified, like-kind property. In the case of a partial exchange, tax liability would be incurred on the non-qualifying portion and capital gain deferred on the qualifying portion under Section 1031.