What language should be added to the contract in a 1031 exchange? The language below is satisfactory to establish the Exchanger’s intent to perform a tax deferred exchange and releases the other parties from costs or liabilities as a result of the exchange:
Contract Language for the Sale of Relinquished Property
“Buyer is aware and acknowledges 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, costs, liabilities, or delays in time resulting from such an exchange. Buyer agrees to an assignment of this contract by the Seller.”
Contract Language for the Purchase of Replacement Property
“Seller is aware and acknowledges 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, costs, liabilities, or delays in time resulting from such an exchange. Seller agrees to an assignment of this contract by the Buyer.”