Must a Contract of Sale mention the fact that a party desires to initiate a Sec. 1031 exchange?
Typically, a contract of sale is negotiated and executed by a taxpayer and the other party in the usual fashion. A number of advisors and commentators suggest that the contract contain an exchange cooperation clause for the benefit of the taxpayer seeking to implement the exchange, similar to the following: Seller and Purchaser hereby acknowledge and agree that Seller intends to complete a §1031 Tax Deferred Exchange involving this Property in order to qualify for non-recognition of gain pursuant to §1031, Internal Revenue Code of 1954, as amended. In order to effect this exchange, Purchaser agrees to execute all documents reasonably necessary or desirable to facilitate the exchange. It is specifically agreed that Purchaser shall incur no additional cost, expense or liability as a result of such exchange, and the exchange will not cause a delay in closing the transaction. Notwithstanding anything contained herein to the contrary, seller may assign this Contract to a Qualified Intermedi
