- 1031 Exchanges
- Tenants-In-Common
- Exchange Details & Requirements
- Real Estate Professional
Dual Registration Program - Tax Professionals, Legal Advisors & Northland Securities1031
- About Us
- The Tax Deferred Exchange
- How to Initiate an Exchange
- 1031 Exchange Requirements
- Do's & Don'ts of 1031 Exchange Planning
- Can Your Tax Professional or Legal Advisor Be Your Qualified Intermediary?
- Exchange Terminology
- Like-Kind Property
- 1031 Qualified Property
- Delayed Exchange Deadlines
- Tenant-In-Common Interests
- Master Lease-Tenants-In-Common
- Non-Tax Reasons to Exchange
- Role & Selection of a Qualified Intermediary
- Role of a Tax Professional or
Legal Advisors - Disqualified Parties
- Tenants-in-Common Research &
Due Diligence Reports - Exchange Language
Exchange Terminology
The following is a partial list that will assist the Exchanger with a basic understanding of Exchange terminology. For additional information, contact Northland Securities1031, your Qualified Intermediary or your tax and legal advisor.
Identification Period - The period during which the Exchanger must identify Replacement Property in the exchange. The Identification Period starts on the day the Exchanger transfers the first relinquished Property and ends at midnight on the 45th day thereafter.
Exchange Period - The period during which the Exchanger must acquire Replacement Property in the exchange. The Exchange Period starts on the date the Exchanger transfers the first Relinquished Property and ends on the earlier of the 180th day thereafter or the due date (including extensions) of the Exchanger’s tax return for the year of the transfer of the Relinquished Property.
Relinquished Property - The property “sold” by the Exchanger. This is also sometimes referred to as the “exchange” property or the “downleg” property.
Replacement Property - The property acquired by the Exchanger. This is sometimes referred to as the “acquisition” property or the “upleg” property.
Like-Kind Property - This term refers to the nature or character of the property, not its grade or quality. Generally, real property is “Like-Kind” as to all other real property as long as the Exchanger’s intent is to hold the properties as an investment or for productive use in a trade or business. With regards to personal property, the definition of “Like-Kind” is much more restrictive.
Exchanger - The property owner(s) seeking to defer capital gain tax by utilizing an IRC 1031 exchange. (The Internal Revenue Code uses the term “Taxpayer.”)
Constructive Receipt - A term referring to the control of proceeds by an Exchanger even though funds may not be directly in their possession.
Qualified Intermediary (Q.I.) - The entity that facilitates the exchange for the Exchanger. Although the Treasury Regulations use the term “Qualified Intermediary,” some companies use the term “facilitator” or “accommodator.”
Boot - Fair Market Value of non-qualified (not “Like-Kind”) property received in an exchange. Examples may be but are not limited to: cash, notes, seller financing, furniture, supplies and reduction in debt obligations. Receipt of boot will not disqualify an exchange, but the boot will be taxed to the Exchanger to the extent of the recognized gain.
Northland Securities does not provide tax or legal advice. Accredited investors interested in an IRC 1031 tax deferred exchange should seek advice from their qualified tax and legal advisors.