NOTIFICATION OF ASSIGNMENT in 1031 exchange refers to the process of informing all parties involved in the exchange about the assignment of the exchange to a qualified intermediary (QI). The qualified intermediary acts as a facilitator for the exchange, holding the proceeds from the sale of the original property and using them to purchase the replacement property on behalf of the taxpayer.
- The notification of assignment is an important step in the 1031 exchange process and ensures that all parties involved are aware of the involvement of a qualified intermediary.
- The notification of assignment should be done in writing and should include the name and contact information of the qualified intermediary.
John is planning to complete a 1031 exchange of his rental property. He assigns the exchange to a qualified intermediary and informs the real estate agent, the buyer of the original property, and the seller of the replacement property about the assignment.
- Make sure to provide clear and complete information about the qualified intermediary to all parties involved in the exchange.
- Be timely and proactive in communicating the assignment to minimize potential delays or issues during the exchange process.
- It is recommended to work with a qualified intermediary who has experience with 1031 exchanges and can assist with the notification of the assignment process.
- It is also recommended to keep accurate records of the notification of assignment and all other steps involved in the 1031 exchange.