What is the First Step in a 1031 Exchange?

/What is the First Step in a 1031 Exchange?
What is the First Step in a 1031 Exchange?2019-01-22T13:46:26+00:00
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  1. Always discuss a 1031 tax-deferred exchange with your tax and/or legal advisors.
  2. Call Asset Preservation for a free consultation at any time and definitely before closing on the relinquished property. The following information is needed to begin preparing the exchange documents: A) The name, address and telephone number of the exchanger; and B) The closer/escrow holder’s name, address, telephone number and file number. We will prepare all necessary exchange documentation and will coordinate with the closer/escrow holder, the exchanger’s real estate agent/broker and his or her tax and/or legal advisors.
  3. Include language establishing the intent to effect a 1031 tax deferred exchange in the Purchase and Sale Agreement. The following are examples:

SALE OF RELINQUISHED PROPERTY

“Buyer is aware that Seller intends to perform an IRC Section 1031 tax deferred exchange. Seller requests Buyer’s cooperation in such an exchange and agrees to hold Buyer harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Buyer agrees to an assignment of this contract to Asset Preservation, Inc. by the Seller.”

PURCHASE OF REPLACEMENT PROPERTY

“Seller is aware that Buyer intends to perform an IRC Section 1031 tax deferred exchange. Buyer requests Seller’s cooperation in such an exchange, and agrees to hold Seller harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Seller agrees to an assignment of this contract to Asset Preservation, Inc. by the Buyer.”

VACATION HOME EXCHANGE HANDBOOK

In response to increased activity in many vacation markets, Asset Preservation has created a brand-new Vacation Home Handbook that covers many tax issues related to the ownership and sale of a vacation or second home. This brochure is very comprehensive, contains hyperlinks to key tax code sections and provides useful guidance to property owners, real estate professionals, closers, attorneys and CPAs in resort communities and vacation home marketplaces throughout the United States.

DOWNLOAD THE VACATION HOME HANDBOOK