Fidelity National 1031 Exchange Services, Inc.

Flowchart for §1031 Tax Deferred Exchange (Simultaneous)

  1. Exchanger enters into a contract (containing an exchange cooperation clause) to sell the Relinquished Property. 
  2. Exchanger enters into a contract (containing an exchange cooperation clause) to purchase the Replacement Property. 
  3. Exchanger (either directly or through their closer, broker or attorney) requests Fidelity National 1031 Exchange Services, Inc. (FNX1031) to act as Qualified Intermediary. 
    • FNX1031 obtains copies of the following on both the Relinquished Property and the Replacement Property: 
      • A. Preliminary Title Report/Commitment

      B. Purchase and Sale Contract Agreement/Closing Instructions FNX1031 prepares: 
      A. Exchange Agreement 
      B. Assignment of Seller's Position (Relinquished Property) 
      C. Assignment of Buyer's Position (Replacement Property) 
  4. Exchanger reviews and signs exchange documentation and reviews and approves closing statements. 
  5. FNX1031 is reflected as the Seller and closes on the sale of the Relinquished Property. FNX1031 instructs closer to prepare and record deed directly from the Exchanger to the Buyer. 
  6. FNX1031 authorizes the Relinquished Property closer to transfer the sale proceeds for the benefit of FNX1031 directly to the Replacement Property closer. 
  7. FNX1031 is reflected as Buyer and closes on the purchase of the Replacement Property. FNX1031 instructs closer to prepare and record the deed directly from the Seller to the Exchanger. 

Sample Exchange Cooperation Clause
(Relinquished Property)

Buyer hereby acknowledges it is the intent of the Seller to effect an IRC Section 1031 tax deferred exchange which will not delay the closing or cause additional expense to the Buyer. The Seller's rights and obligations under this agreement may be assigned to Fidelity National 1031 Exchange Services, Inc., a Qualified Intermediary, for the purpose of completing such an exchange. Buyer agrees to cooperate with the Seller and Fidelity National 1031 Exchange Services, Inc. in a manner necessary to complete the exchange.

Note: For an Exchange Cooperation Clause for Replacement Property, replace Buyer with Seller and Seller with Buyer.

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