Special Documents You Need for a 1031 Exchange

1031 exchange documents

What special documents do you need to do a 1031 deferred exchange? Under the treasury regulations you have to have an agreement with a facilitator - typically that's a qualified intermediary under the Safe Harbor regulations.  This agreement must limit your rights to receive the cash from the relinquished property closing. 

Sale Agreement

Next you need a sale agreement with the buyer, typically a third-party stranger that you're selling the relinquish property to. In that contract it's a good idea to put a cooperation clause that says you’re doing a 1031 exchange that’s part of an interdependent plan to do an exchange. Also in that clause you may want to provide that the buyer is going to cooperate with your 1031 by signing an acknowledgement that they received notice that you have assigned your rights in the purchase agreement to the intermediary.

On the Replacement Property Side

So you’ve got an exchange agreement, a sales agreement with the buyer, and a notice of assignment that the buyer’s going to sign. Then on the replacement property side the documents that you're going to need are an identification written document in which you designate what replacement properties you want to receive within the deadlines.

Then you typically get a purchase agreement or contract on some or all of those identify properties, again containing a cooperation clause. So you have a sale agreement with the seller of the replacement property. Then on top of that we have 1031 documents for the closing of the replacement property which would include a notice of assignment of the contract for the third party seller.

  • 1031 Hotline: If you have questions about the documents needed for a 1031 exchange, feel free to call me at 612-643-1031.

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