THE 1031 EXCHANGE TERMINOLOGY

  • 1031 Safe Harbor Regulations – The guidelines which property owners must follow in order to have a qualifying exchange under IRS Code Section 1031.
  • Accommodator - See Qualified Intermediary
  • Buyer – The person with cash or (or the ability to obtain cash) who wants to acquire Exchanger’s property.
  • Deferred Exchange – Two closings wherein there will be a delay between the closing of the relinquished property and the subsequent closing of the replacement property. The delay may not exceed 180 days. Also referred to as a delayed exchange.
  • Exchanger – The owner of the ivestment property who wishes to accomplish a 1031 Exchange. Also referred to as a Inestor or Taxpayer.
  • Move-down 1031 Exchange – An exchange (deferred or simultaneous) whereby the investor exchanges down to a replacement property the cost of which is less than the net selling price of the relinquished property.

  • Move-up 1031 Exchange – An exchange (deferred or simultaneous) whereby the investor exchanges up to a replacement property the cost of which is equal to or greater than the net selling price of the relinquished property.
  • Qualified Intermediary – The third party entity that handles the exchange. Also known as the Accommodator. An escrow company for exchanges.
  • Relinquished Property – A property owned by the investor, which he wishes to sell via a 1031 Exchange.
  • Replacement Property – The new property that an investor wishes to acquire via the 1031 Exchange.
  • Seller – The owner of the replacement property that the taxpayer wishes to acquire via the 1031 Exchange.
  • Simultaneous Exchange – Two closings which occur at or about the same time and often at the same place.