To establish the intent to perform a 1031 exchange, the Exchangor needs to follow 1031 exchange assignment language requirements for the Purchase and Sale Agreement. The language is not required when selling, but when buying, it must appear in the contract or addendum given the rights, not the obligation of the contract are assigned to the Intermediary at the closing.
Sale of Relinquished Property:
"Buyer is aware that Seller has the option to qualify this transaction as an Internal Revenue Code Section 1031 tax deferred exchange. Seller requests Buyer's cooperation in the event of an exchange and agrees to the assignment of this contract to Atlas 1031 Exchange, LLC by the Seller. Seller agrees to hold the Buyer harmless from any and all claims, liabilities and costs of such an exchange."
Purchase of Replacement Property:
"Seller is aware that Buyer has the option to qualify this transaction as an Internal Revenue Code Section 1031 tax deferred exchange. Buyer requests Seller's cooperation in the event of an exchange and agrees to the assignment of this contract to Atlas 1031 Exchange, LLC by the Buyer. Buyer agrees to hold the Seller harmless from any and all claims, liabilities and costs of such an exchange."
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