Not something I see very often but to me the first step is in getting a transaction that balances.  I cringe whenever folks use the terms "sale price" and "purchase price".  1031 is for EXCHANGES.  So taxpayer gave up x in exchange for y.  That means x = y.

Gave up:

$212,500 value of property
$150,000 down payment
$207,500 note payable

Received:

$357,500 value of property
$ 43,000 mortgage pay-off
$ 15,926 of exchange fee "value"

x != y