“The buyer is aware of this and recognizes that the seller intends to make a deferred exchange in accordance with Section 1031 of the IRC. The seller asks the buyer to participate and agrees to compensate the buyer for any claims, expenses, debts or delays resulting from such an exchange. The buyer accepts the assignment of this contract by the seller. EXCHANGE DOCUMENTS PREPARED FOR REPLACEMENT PROPERTY: Send a copy of the sales contract to Legal 1031. Documents must be prepared for all replacement properties. Form IRS 8824 for notification completed 1031 STOCK exchanges CONTACT LEGAL 1031: Qualified intermediary must be involved before the sale of the abandoned property. Contact Legal 1031 Exchange Services, Inc. (877) 701-1031 or “protected e-mail.” Various 1031 exchange agreements, documents and information EXCHANGE DOCUMENTS PREPARED: Send a copy of the sales contract to Legal 1031. Legal 1031 will prepare the 1031 exchange documents necessary for the sale of the abandoned property. If the proceeds of the sale are not used to purchase a replacement property, this amount must be identified in the exchange documents and this amount may be taxable.
At 1031 Exchange Place, many real estate investors turn to our office minutes before the closing of their transaction and successfully turn a sale into a 1031 stock exchange. In most cases, a successful exchange can be made as long as 1031 Exchange Place is contacted before closing. However, it is important that the contracts for the sale and sale of both assets be refundable. To structure a typical exchange transaction, 1031 Exchange Place must be assigned as the seller of the abandoned property and also as a buyer of the replacement property. A exchangeor should check the contract to confirm that they are not prohibited from assigning their position as a “seller” or “buyer” to a qualified intermediary. If a typical 1031 exchange is initiated, qualified intermediation is displayed on the settlement statement as a seller instead of the Exchangors/seller. PURCHASE CONTRACT: Enter a “refundable” contract for the purchase of alternative real estate with 1031 language of exchange cooperation. The interchange must be the same subject, in accordance with IRC Code 1031, to persons and orders relating to both abandoned and alternative property. Document C: Abandoned Property Transfer Agreement (2 pages) Disposal Contract for Abandoned Property (this document rejects the rights of the interchange in the sale portion of the transaction to the qualified intermediary) Document A: Two-part exchange agreement – (3 pages)Agreement for the exchange of like-child properties (a “simple” bipartisan exchange) What language to add to the contract in a 1031 exchange? The following language is satisfactory to justify the interchange`s intention to make a tax exchange and exempts the other parties from the costs or commitments resulting from the exchange: EXECUTE EXCHANGE DOCUMENTS: Exchanger must sign all exchange documents and the seller of the abandoned property must sign the contract of transfer. Executed documents must be sent to Legal 1031 before they are completed. All documents must be completed by Exchanger and the seller before we can process a request for payment of money from the replacement property. Document B: Deferred Like-Kind Property Exchange Agreement (11 Pages) Deferred Like Kind Property Exchange Agreement (a deferred exchange with a qualified intermediary) REPLACEMENT PROPERTY IDENTIFICATION: Exchanger has 45 days after the sale to identify the replacement property, and 180 days after the sale of the identified property.
The identification of the replacement real estate documentation must be completed by Exchanger and forwarded to Legal 1031 until the 45th day following the sale of the first abandoned property.