Sales contract .... correct verbage, reference 1031

[Mike Costello]

New to BP ... so, thank you in advance for your responses.

I have owned a SFH 1031 exchange property for exactly 5 years, two of which i used as my "Primary" residence. I am now selling and want to take advantage of 1031 / 121. What reference to 1031 if any, does my lawyer need to include in the sales contract to make sure I comply with the rules. I am located in CT.

[Steve Morris]

Well, need to see if it still qualifies for investment property first, so I'll assume so.

Usually on PSAs about all we say is that buyer to cooperate in the accommodation of seller's 1031.  It's kind squishy, but it tells buyer you're planning on 1031 from this property and may need some extra time.

Otherwise, you can write something to the effect of no close until satisfactory replacement property found.  However, not too many buyers want to sit around and wait for an open-ended time item.

Also, usually buyers write the PSA.  Are you, as seller, going to be drafting it instead?  THat may be a little sticky.