1031Junction.com

Fagan & Rawlings Capital Management is a resource for real estate investors. This information is provided as a courtesy to our community members. The following information is considered sample 1031 exchange cooperation language.

The following sample 1031 Exchange language clauses may not be appropriate or suitable under certain circumstances. 1031 exchanges can sometimes be extremely complex transactions. You should always consult with your legal, tax and financial advisors prior to executing any Purchase and Sale Agreements, Escrow Instructions, Tax-Deferred Exchange Agreements and/or any other related transactional documentation for guidance in selecting the most appropriate 1031 Exchange cooperation clause language to use for your specific 1031 exchange transaction.

THIS LETTER SHOULD NOT BE CONSTRUED AS PROVIDING TAX OR LEGAL ADVICE. IF TAX OR LEGAL ADVICE IS NEEDED, AN ATTORNEY, ACCOUNTANT OR OTHER QUALIFIED COUNSEL SHOULD BE CONSULTED.

When you make an offer to purchase your replacement property, the following 1031 Exchange language should be used:

“It is the intention of the buyer(s) to purchase this property pursuant to Section 1031 of the Internal Revenue Code as an identified replacement property as part of an exchange. Seller(s) agrees to cooperate with the buyer(s) in any manner necessary to enable buyer(s) to qualify for said exchange at no additional cost or liability to seller. Buyer(s) retains the right to assign all their interest in any agreement to property on or before the closing of the property to (insert QI here) as their Qualified Intermediary for the purpose of completing Buyer’s 1031 exchange transaction.”

When you enter a contract to sell your relinquished property, the following 1031 Exchange language should be used:

“Buyer(s) acknowledges that Seller(s) intends to perform a tax-deferred exchange transaction pursuant to Section 1031 of the Internal Revenue Code and Section 1.1031 of the Treasury Regulations and that Seller(s) rights, title and interest (but not obligations) pursuant to this (Insert Name of Purchase and Sale Agreement or Sales Contract or Escrow Instructions) will be assigned to (insert QI here) as Seller's Qualified Intermediary, for the purpose of completing Seller's 1031 exchange transaction. Buyer(s) agrees to cooperate with the seller(s) in any manner necessary to enable seller(s) to qualify for said exchange at no additional cost or liability to seller.”