When selling your Relinquished Property, you may want to add the following Cooperation Clause language to your contract:
“In the event Seller so elects, Buyer agrees to cooperate with Seller in effecting a tax-deferred exchange under Internal Revenue Code Section 1031 as amended. Seller shall have the right to elect this tax-deferred exchange at any time prior to the closing date and to assign this contract in connection with such tax-deferred exchange.”
If your contract does not include this Cooperation Clause, the contract can be amended at closing, provided the buyer does not object. This is not a requirement or necessity to partake in a 1031 exchange, but will protect the Seller (Buyer in the other section) in the event the Seller (Buyer in the other section) elects to partake in a 1031 exchange.
When purchasing your Relinquished Property, you may want to add the following Cooperation Clause language to your contract:
“In the event the Buyer so elects, Seller agrees to cooperate with Buyer in effecting a tax-deferred exchange under Internal Revenue Code Section 1031 as amended. The buyer shall have the right to elect this tax-deferred exchange at any time prior to the closing date and to assign this contract in connection with such tax-deferred exchange.”
If your contract does not include this Cooperation Clause, the contract can be amended at closing, provided the Seller does not object. This is not a requirement or necessity to partake in a 1031 exchange, but will protect the Seller (Buyer in the other section) in the event the Seller (Buyer in the other section) elects to partake in a 1031 exchange.
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