1031 Exchange Question

[Openfire]

Client purchased property for $55K, and is selling for $92. It is a rental property. He is interested in using the initial investment amount for personal use, and wants to use the 1031 exchange rules and reinvest the gain. Considering all depreciation, costs, etc. and the adjustments thereof, this should be straightforward, correct?

[Burke]

Using 1031 to defer the gain requires that all the funds go into the new property(ies) meeting the like-kind definitions via a Qualified Intermediary. He cannot take possession of any of the monies, or they will be considered taxable.