Sometimes the other parties to a purchase and sale agreement refuse to cooperate with your 1031 exchange, and will not sign the standard 1031 acknowledgement that they have received written notice regarding your nominal assignment of rights to your qualified intermediary. What is there to do in this situation?
Steps to Take
Here are the steps to take if you find yourself in this situation:
- Provide the other parties written notice bay fax, e-mail, in-person delivery (or the method specified in the purchase contract for providing notices).
- Save the proof that it was sent (on or before the end of the day of closing).
The treasury regulations say you must give them written notice of the assignment. While it is prudent to get back a signed acknowledgement (to have proof that you complied in giving the requisite notice), you don’t have to get back signed proof, and you can complete the exchange with a fax confirmation, e-mail receipt or other documentation.
1031 Pro Tip
Another, tip is to let the uncooperative party know that the deeds are still running the same way (from the seller to the buyer) and that the “assignment” is just for 1031 tax purposes, but the deal is still with the original parties.
Qualified Intermediaries in Minnesota
The qualified intermediaries at Commercial Partners Exchange Company have over twenty years of experience facilitating like-kind exchanges of real property throughout the country. We can handle all of your 1031 exchange documents, answer all of your questions, and help you find replacement property. Contact us today at our downtown Minneapolis office to learn more about our wide range of services and see how we can help you with your 1031 exchange.