A tax-deferred exchange allowing investors to defer capital gains taxes on the sale of investment properties by reinvesting the proceeds into a like-kind property.
The original cost of an asset, adjusted for various factors such as improvements and depreciation, used to calculate capital gains.
Non-like-kind property or cash received by the taxpayer in an exchange, subject to taxation.
The portion of realized gain in a 1031 exchange that cannot be deferred due to the receipt of boot.
Combining personal funds with exchange funds to acquire replacement property, potentially jeopardizing the tax-deferred status of the exchange.
The profit realized from the sale of an asset, subject to taxation unless deferred through a 1031 exchange.
The taxpayer's control or access to funds from a 1031 exchange before the completion of the exchange, potentially disqualifying it for tax deferral.
A type of 1031 exchange where the sale of the relinquished property and acquisition of replacement property occur on different dates.
A legal document outlining the terms and conditions of a 1031 exchange between the taxpayer and the qualified intermediary.
The time frame allowed for identifying and acquiring replacement property in a 1031 exchange, typically 180 days from the sale of the relinquished property.
Another term for a delayed exchange, where the replacement property is acquired after the sale of the relinquished property.
The initial 45 days of the exchange period during which the taxpayer must identify potential replacement properties.
A method of selling property where the buyer pays in installments over time, potentially allowing for deferral of capital gains tax.
Properties of the same nature or character, regardless of grade or quality, eligible for exchange under Section 1031.
A third-party facilitator responsible for holding funds during a 1031 exchange and ensuring compliance with IRS regulations.
The requirement that properties involved in a 1031 exchange must be held for productive use in a trade or business or for investment purposes.
The property being sold or exchanged by the taxpayer in a 1031 exchange.
A type of 1031 exchange where the replacement property is acquired before the sale of the relinquished property.
IRS doctrine used to evaluate multiple steps of a transaction as a single exchange, potentially impacting the tax treatment of the transaction.