You are the listing agent for the home of your college friend. You will also be finding this friend a new home (as buyer's agent). Your friend has owned his present home for over 20 years and anticipates selling his home for three times the original price paid for it. He expresses concern that after paying the tax on this gain he will not have enough money to make the down payment on a new home. 

Provide your friend the best advice you can, including the following:

1. Describe and explain 1031 exchange rules and if they will help him defer his gain on the sale of his personal residence.
2. What is the capital gain exclusion and the maximum amount of gain that may be excluded from the gain on the sale of his personal residence?
3. If the new home is purchased for a larger amount than the amount for which the old home was sold, will all the gain be deferred?
4. If he has a mortgage on the new home, will the interest be tax deductible? Identify other property expenses that are deductible.
5. Explain the various types of loans and how the interest is calculated.