1031 Exchange at Wendy Morris Realty


How a 1031 exchange is accomplished

The following sequence represents the order of steps in a typical 1031 exchange:

Step 1. Retain the services of tax counsel/CPA. Become advised by same.

Step 2. Sell the property, including the Cooperation Clause in the sales agreement. "Buyer is aware that the seller's intention is to complete a 1031 Exchange through this transaction and hereby agrees to cooperate with seller to accomplish same, at no additional cost or liability to buyer." Make sure your escrow officer/closing agent contacts the Qualified Intermediary to order the exchange documents.

Step 3. Enter into a 1031 exchange agreement with your Qualified Intermediary, in which the Qualified Intermediary is named as principal in the sale of your relinquished property and the subsequent purchase of your replacement property. The 1031 Exchange Agreement must meet with IRS Requirements, especially pertaining to the proceeds. Along with said agreement, an amendment to escrow is signed which so names the Qualified Intermediary as seller. Normally the deed is still prepared for recording from the taxpayer to the true buyer. This is called direct deeding. It is not necessary to have the replacement property identified at this time.

Step 4. The relinquished escrow closes, and the closing statement reflects that the Qualified Intermediary was the seller, and the proceeds go to your Qualified Intermediary. The funds should be placed in a separate, completely segregated money market account to insure liquidity and safety. The closing date of the relinquished property escrow is Day 0 of the exchange, and that’s when the exchange clock begins to tick. Written identification of the address of the replacement property must be sent within 45 days and the identified replacement property must be acquired by the taxpayer within 180 days.

Step 5. The taxpayer sends written identification of the address or legal description of the replacement property to the Qualified Intermediary, on or before Day 45 of the exchange. It must be signed by everyone who signed the exchange agreement, and it may be faxed, hand delivered, or mailed either to the Qualified Intermediary, the seller of the replacement property or his agent, or to a totally unrelated attorney. Send it via certified mail, return receipt requested. You will then have proof of receipt from a government agency.

Step 6. Taxpayer enters into an agreement to purchase replacement property, again including the Cooperation Clause. "Seller is aware that the buyer's intention is to complete a 1031 Exchange through this transaction and hereby agrees to cooperate with buyer to accomplish same, at no additional cost or liability to seller." An amendment is signed naming the Qualified Intermediary as buyer, but again the deeding is from the true seller to the taxpayer.

Step 7. When conditions are satisfied and escrow is prepared to close and certainly prior to the 180th day, per the 1031 Exchange Agreement, the Qualified Intermediary forwards the exchange funds and gross proceeds to escrow, and the closing statement reflects the Qualified Intermediary as the buyer. A final accounting is sent by the Qualified Intermediary to the taxpayer, showing the funds coming in from one escrow, and going out to the other, all without constructive receipt by the taxpayer.

Step 8. Taxpayer files form 8824 with the IRS when taxes are filed, and whatever similar document your particular state requires.


All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independent verified. Listing information is provided for consumer personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law. The source of the listing data is as follows: My Florida Regional MLS (updated 3/23/18)

Listing Search

Translate Tool

Featured Listings
Clermont Real Estate
LAKEFRONT HOME ! Located on Lake Minneola, the Clermont Chain of Lakes. The original home has been updated with new met... Read More
Mount Dora Real Estate
Tavares Real Estate
PRE-CONSTRUCTION. TO BE BUILT. LAKEFRONT LIVING! 4 BED, 4 BATH CUSTOM HOME. Picture your new home set amidst this gorge... Read More
Leesburg Real Estate
Waterfront Living on Lake Harris embodies tranquility, beauty & adventure. This home has a nice high elevation in the b... Read More
Kissimmee Real Estate
3.5 BATH
Welcome to Bellalago! Bring the whole family!!! Are you looking for a gated, waterfront community to compliment your pe... Read More
Contact Wendy Morris


Wendy Morris LLC
DBA Wendy Morris Realty
Licensed in the State of Florida
BK 3146762
14832 Speer Lake Drive
Winter Garden, FL 34787

Your privacy is our utmost concern. We will never sell your personal information. Privacy Policy
©2011 -2018 windermerehomes.net - all rights reserved. | Site Map