Assignment and Assumption of Replacement Property

1031 Exchanges
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Assignment and Assumption of Replacement Property

Magda Rose
Member since 2024 · 12 posts · 5 votes

Good morning,

Is there a 1031 exchange attorney in this group who would be willing to to explain the standard "Assignment and Assumption of Replacement Property" form? Looking to have one reviewed for any concerns if willing! Thank you!

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  • Magda Rose
    OP
    Member since 2024 · 12 posts · 5 votes
    1w

    Thank you, this is helpful!

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  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    1w

    @Magda Rose I believe it was the 6th District Court of Appeals that called the"legal fiction of the 1031 exchange". IN a 1031 exchange, you assign your rigts to sell your old property to the QI for the 1031. The property should never be deeded to the QI. It should go directly to the buyer. But the seller's box of the closing statement will show the QI as the seller. The same thing happens with the purchase.

    The implied question is, "Did you sell a piece of property?" - no. "Did you buy a piece of property?" - no. What did you do???

    You "exchanged" properties with your qualified intermediary. Just remember - it doesn't have to make sense. It's the IRS.

    But whatever you do, do not allow any QI to take title to any property at any time outside of a reverse exchange. All properties should be directly deeded from you to the buyer. And from the seller to you.

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