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Tax Deferred Exchange

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					This document provides two clauses that can be included in a purchase agreement for
real property that will allow for a tax deferred exchange. The first clause can be used
when selling or transferring property and the second clause can be used when
purchasing property. Typically, income tax must be paid on the amounts realized after
selling an investment property. However, tax deferred exchanges do not require a
payment of income taxes because it exchanges one property for another rather than an
outright sale. This document can be useful for individuals or small businesses that want
to sell investment property but do not want to pay income tax.
                                Tax Deferred Exchange
CLAUSE 1 – Sale or Disposition of a Property

The Purchaser hereby acknowledges that the Vendor shall, on or before the closing of the
transaction contemplated herein, carry out a tax-deferred exchange transaction pursuant to the
provisions of the Internal Revenue Code. The Purchaser acknowledges that all of the Vendor’s
rights, title, and interest in and to the property being sold and conveyed to the Purchaser shall be
assigned to __________________________ [NAME OF PERSON/PARTY WHO WILL BE
ACCEPTING THE VENDOR'S PROPERTY TEMPORARILY AS THE MIDDLE-MAN
IN THIS EXCHANGE] (hereinafter, the “Facilitator”) for the sole purpose of carrying out the
tax-deferred exchange transaction contemplated herein.
The Purchaser agrees that it/he/she shall execute and deliver any and all necessary documents
which may be required to fully perform, carry out and effect the tax-deferred exchange
contemplated herein.
CLAUSE 2 – Purchase of a Property

The Vendor hereby acknowledges that the Purchaser shall, on or before the closing of the
transaction contemplated herein, carry out a tax-deferred exchange transaction pursuant to the
provisions of the Internal Revenue Code. The Vendor acknowledges that all of the Purchaser’s
right, title and interest in and to the property being purchased and acquired by the Purchaser shall
be assigned to the Facilitator for the sole purpose of carrying out the tax-deferred exchange
transaction contemplated herein.

The Vendor agrees that it/he/she shall execute and deliver any and all necessary documents
which may be required to fully perform, carry out and effect the tax-deferred exchange
contemplated herein.


___________________________________________________          _____________________


Name and Signature of Purchaser                              Date Signed


__________________________________________                   _________________
Name and Signature of Vendor                                 Date Signed


___________________________________________                  _________________
Name and Signature of “Facilitator”                          Date                           Signed




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DOCUMENT INFO
Description: This document provides two clauses that can be included in a purchase agreement for real property that will allow for a tax deferred exchange. The first clause can be used when selling or transferring property and the second clause can be used when purchasing property. Typically, income tax must be paid on the amounts realized after selling an investment property. However, tax deferred exchanges do not require a payment of income taxes because it exchanges one property for another rather than an outright sale. This document can be useful for individuals or small businesses that want to sell investment property but do not want to pay income tax.
This document is also part of a package Real Estate Business Templates 153 Documents Included