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If you own property worth $2 million and do a 1031 like kind exchange for property that is worth $1.5 million, what happens to the

If you own property worth $2 million and do a 1031 like kind exchange for property that is worth $1.5 million, what happens to the $500K difference with respect to capital gains?

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Tax on $500K is owed

The tax is deferred

Tax on the full $2 million is owed

Tax on the full $1.5 million is owed

The tax is eliminated

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