ACTUAL RECEIPT: When the exchanger has physical possession of the exchange funds
ADJUSTED BASIS: Original purchase price plus capital improvements minus depreciation
ASSIGNMENT AGREEMENT: An assignment agreement in which the Qualified Intermediary is assigned into the sale or purchase transaction as the seller or buyer
BOOT: Taxable cash proceeds or non-like-kind property received in an exchange
CAPITAL GAINS: Profit realized on the sale of an asset (the difference between the selling price and adjusted basis)
COMMUNITY PROPERTY: Property acquired by a husband and wife during their marriage wherein each spouse has a right to an equal interest in the property
CONSTRUCTIVE RECEIPT: When the exchanger has obtained control over the sale proceeds or exchange funds (either directly or indirectly)
DIRECT DEEDING: The transfer of title directly from the exchanger to the buyer on a sale and from the seller to the exchanger on a purchase
DOWNLEG: Also known as phase I in an exchange (the sale)
DST: A Delaware Statutory Trust is a separate legal entity created as a trust under Delaware statutory law, in which investors own a pro rata interest in the trust and have the right to receive distributions from the operation of the trust, either from rental income, or from the eventual sale of the property
EXCHANGER: The taxpayer taking advantage of the 1031 exchange tax deferral
EXCHANGE AGREEMENT: The written agreement defining the transfer of the relinquished property, the subsequent receipt of the replacement property, and the restrictions on the exchange proceeds during the exchange period
EXCHANGE PERIOD: The period of time in which replacement property must be received by the Exchanger; Ends on the earlier of 180 calendar days after the relinquished property closing or the due date for the Exchanger’s tax return
IDENTIFICATION PERIOD: A maximum of 45 calendar days from the relinquished property closing to properly identify potential replacement property or properties
LIKE-KIND PROPERTY: Any real property in the Unites States used for productive use in trade or business or held for investment; both the relinquished and replacement properties must be considered “like-kind” to qualify for tax deferral
QUALIFIED INTERMEDIARY: Also known as an Accommodator, is a company that facilitates Internal Revenue Code Section 1031 tax-deferred exchanges and is not a related party to the exchanger (agent, attorney, broker, etc). CR Capital 1031 is a “Qualified Intermediary”
REALIZED GAIN: The potential taxable gain
RECOGNIZED GAIN: The actual gain subject to tax
RELINQUISHED PROPERTY: Property given up by the Exchanger; referred to as the sale, ‘downleg’ or ‘Phase I’ of the exchange
REPLACEMENT PROPERTY: Property received by the Exchanger: referred to as the purchase, ‘upleg’ or ‘Phase II’ of the exchange
TAX OWNERSHIP: The taxpayer who files the tax returns for the property
TENANTS IN COMMON: A specific type of concurrent, or simultaneous, ownership by two or more parties who hold an individual, undivided ownership interest in real property
UPLEG: Also known as phase II in an exchange (the purchase)
VESTING: The way in which a person or entity holds title: the individual or entity with rights to the legal benefits and burdens of the property
