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1031 Glossary

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  • Term
    Definition
  • 45 day Identification period (the 45 day rule) The exchanger must identify all potential replacement property within the first 45 days of the 180 day exchange period.
  • The Exchanger must identify the potential replacement property (ies) within the first 45 days of the 180 day Exchange Period.
  • (One of three replacement property identification rules) The Exchanger may identify more than three properties, but the total fair market value of what is identified cannot exceed 200% of the fair market value of the relinquished property.
  • An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirement regarding their income, net worth and asset size.(...)
  • A broker-dealer (B-D) is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers. There are thousands of broker-dealers comprising two broad categories: a wirehouse, which sells its own products, or an independent broker-dealer, which(...)
  • A broker-dealer (B-D) is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers. There are thousands of broker-dealers comprising two broad categories: a wirehouse, which sells its own products, or an independent broker-dealer, which(...)
  • A broker-dealer (B-D) is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers. There are thousands of broker-dealers comprising two broad categories: a wirehouse, which sells its own products, or an independent broker-dealer, which(...)
  • A broker-dealer (B-D) is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers. There are thousands of broker-dealers comprising two broad categories: a wirehouse, which sells its own products, or an independent broker-dealer, which(...)
  • Delaware Statutory Trust (DST) A Delaware Statutory Trust is a separate legal entity created as a trust under Delaware statutory law. (DST) 1031 exchange is a purchase by an investor of beneficial interests in the Trust. Where the investor receives a Certificate of Beneficial Interests.(...)
  • Delaware Statutory Trust (DST) A Delaware Statutory Trust is a separate legal entity created as a trust under Delaware statutory law. (DST) 1031 exchange is a purchase by an investor of beneficial interests in the Trust. Where the investor receives a Certificate of Beneficial Interests.(...)
  • Section 1031 of the Internal Revenue Code allows an owner of investment property to exchange property and defer paying federal and state capital gain taxes (15-20%+ applicable state taxes) and taxes on gain from depreciation (25%) and the Obama Care tax (3.8%) when required if they purchase a(...)
  • A loan where the note holder can only look to the property for security if his note is not paid. Non-recourse does not protect the payer of the note from fraud.
  • Private Placement Memorandum (PPM) Private Placements are exempt from registration under the Securities Act of 1933 and most are offered under Regulation D. The offering memorandum for a property includes disclosures of information obtained from the issuer including the nature, character,(...)
  • Private Placement Memorandum (PPM) Private Placements are exempt from registration under the Securities Act of 1933 and most are offered under Regulation D. The offering memorandum for a property includes disclosures of information obtained from the issuer including the nature, character,(...)
  • Qualified Intermediary (Accommodator, Facilitator) prepares the necessary documentation, holds and protects the exchange proceeds and oversees each closing.
  • Qualified Intermediary (Accommodator, Facilitator) prepares the necessary documentation, holds and protects the exchange proceeds and oversees each closing.
  • Qualified Intermediary (Accommodator, Facilitator) prepares the necessary documentation, holds and protects the exchange proceeds and oversees each closing.
  • Clients should keep in mind the following possible risks: Potential for property value loss. Possible change in tax status. Potential for lack of disclosure. Illiquidity. Potential reduction or elimination of monthly cash flow distributions. Adverse impact of fees and(...)
  • The Sponsor (or the Manager and sometimes the Broker/Dealer) is an entity that offers to Exchange a DST interest in real property to complete their exchange. The Sponsor has either placed the property under contract, built it or purchased it for an exchange. If a purchase, before committing to(...)
  • The Sponsor (or the Manager and sometimes the Broker/Dealer) is an entity that offers to Exchange a DST interest in real property to complete their exchange. The Sponsor has either placed the property under contract, built it or purchased it for an exchange. If a purchase, before committing to(...)
  • The Sponsor (or the Manager and sometimes the Broker/Dealer) is an entity that offers to Exchange a DST interest in real property to complete their exchange. The Sponsor has either placed the property under contract, built it or purchased it for an exchange. If a purchase, before committing to(...)
  • A Tenant in Common 1031 exchange is a purchase by an investor of an undivided fractional interest in real property to complete his exchange. The investor receives at settlement an individual deed stating his undivided percentage ownership in the property. He has the same rights as he would as(...)
  • A Tenant in Common 1031 exchange is a purchase by an investor of an undivided fractional interest in real property to complete his exchange. The investor receives at settlement an individual deed stating his undivided percentage ownership in the property. He has the same rights as he would as(...)
  • The Exchanger may identify up to three properties of any value.
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