When you contract to sell your
property, you make the buyer aware, by special
language in the contract, of your intention to
do a Section 1031 exchange. A sample clause is:
Seller reserves the right to assign the contract
to Independent Trustees, Inc., as exchange intermediary,
to effect a like-kind exchange of the Property
in accordance with Section 1031 of the Internal
Revenue Code of 1986, as amended, and the regulations
thereunder. Purchaser consents to such assignment
and agrees to sign a Notice of Assignment prior
to closing confirming that Purchaser has received
the Notice of Assignment and consented to the
assignment.
This will not delay the closing nor will it cause
the buyer any additional expense.
A similar clause must be inserted in the contract
for your replacement property to advise the seller
of that property of your intention to do a 1031
exchange. Purchaser reserves the right to
assign the contract to Independent Trustees, Inc.
to effect a like-kind exchange of the Purchaser’s
real property, in accordance with Section 1031
of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder. Seller consents
to such assignment and agrees to sign a Notice
of Assignment prior to closing confirming that
Seller has received the Notice of Assignment and
consented to the assignment. |
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