There are 3 Basic Guidelines set by the IRS for total tax deferred treatment.

1) The Replacement property purchase price should be equal to or greater than the Relinquished property sales price.

2) The Replacement property debt (mortgage) should be equal to or greater than the Relinquished property debt (no "Debt Relief").

3) All net proceeds should be used to acquire the Replacement property.

If you do not meet all of the above guidelines, you may still do an exchange, but you may be subject to tax on the difference. We recommend you seek tax advice when attempting a "Partial Exchange".