--- title: Realized 1031 Glossary of Terms | 1031 Exchange description: 1031 Exchange | Real estate investing help - 1031 Exchange, Capital Gains, and other valuable investing terms image: https://www.realized1031.com/hubfs/social-suggested-images/Realized_Glossary_Graphic.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Glossary ### [1031 Exchange (aka like-kind exchange)](https://www.realized1031.com/glossary/1031-exchange) 1031 Exchange is a method of deferring capital gains taxes on the sale of real estate held for investment purposes by exchanging proceeds from the sale of such asset, into like-kind property of equal or greater value that is held for investment purposes, as defined in IRC Section 1031. [Read More](https://www.realized1031.com/glossary/1031-exchange) ### [180-Day Exchange Period](https://www.realized1031.com/glossary/180-day-exchange-period) 180-day exchange period is defined under IRC Section 1031, which states that an exchanger or taxpayer executing a delayed exchange has 180 calendar days from the closing date of the sale [Read More](https://www.realized1031.com/glossary/180-day-exchange-period) ### [200% Rule](https://www.realized1031.com/glossary/200-percent-rule) Under IRC Section 1031, an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date [Read More](https://www.realized1031.com/glossary/200-percent-rule) ### [45-Day Identification Period](https://www.realized1031.com/glossary/45-day-exchange-period) Under IRC Section 1031, an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date of the sale of their [Read More](https://www.realized1031.com/glossary/45-day-exchange-period) ### [95% Rule](https://www.realized1031.com/glossary/95-percent-rule) Under IRC Section 1031, an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date of the sale of their relinquished property to formally identify a replacement property or properties. [Read More](https://www.realized1031.com/glossary/95-percent-rule) ### [Accommodator](https://www.realized1031.com/glossary/accommodator) An independent person, company, or entity that enters into a written agreement with the exchanger to facilitate the transfer of proceeds from the buyer of the relinquished property to the exchanger and from the exchanger to the seller of the replacement property to effect a tax deferred exchange under IRC Section 1031. [Read More](https://www.realized1031.com/glossary/accommodator) ### [Actual Receipt](https://www.realized1031.com/glossary/actual-receipt) Actual receipt is physical possession of, exchange proceeds or other property by an exchanger completing a tax-deferred like-kind exchange. Any receipt of the exchange proceeds during the exchange period will disqualify the entire tax-deferred exchange transaction under IRC Section 1031. An actual receipt isn’t a paper receipt for the purchase of something, such as might happen at a retail store. Instead, it is another term used to express possession of sale proceeds of the relinquished property in a 1031 exchange. A common form of actual receipt is a check for the sale proceeds. Two receipts can occur in a 1031 exchange. One is the actual, and the other is the constructive receipt. A constructive receipt may involve the client’s attorney. In this case, the attorney is an agent of the client and takes possession of sale proceeds then passes them on to the client. That violates the 1031 exchange rules. [Read More](https://www.realized1031.com/glossary/actual-receipt) ### [Beneficial Interest](https://www.realized1031.com/glossary/beneficial-interest) A beneficial interest, typically referred to in manners concerning trusts, is the right to receive benefit from assets held by another party. [Read More](https://www.realized1031.com/glossary/beneficial-interest) ### [Boot](https://www.realized1031.com/glossary/boot) Boot, although not specifically defined (or even mentioned) in IRC Section 1031, is commonly used and refers to the fair market value of cash, [Read More](https://www.realized1031.com/glossary/boot) ### [Broker Dealer](https://www.realized1031.com/glossary/broker-dealer) Broker dealer is a person or firm in the business of buying and selling securities, operating as both a broker and a dealer, depending on the transaction. [Read More](https://www.realized1031.com/glossary/broker-dealer) ### [Concurrent Exchange](https://www.realized1031.com/glossary/concurrent-exchange) Concurrent exchange refers to a method of executing a tax deferred exchange (aka 1031 exchange or like-kind exchange) where the sale of the relinquished property [Read More](https://www.realized1031.com/glossary/concurrent-exchange) ### [Constructive Receipt](https://www.realized1031.com/glossary/constructive-receipt) Constructive receipt is direct access to tax-deferred like-kind exchange funds or other property by an exchanger completing a tax-deferred like-kind exchange. [Read More](https://www.realized1031.com/glossary/constructive-receipt) ### [Delayed Exchange](https://www.realized1031.com/glossary/delayed-exchange) Delayed exchange refers to a method of executing a tax deferred exchange (aka 1031 exchange or like-kind exchange) in which the exchanger or taxpayer sells [Read More](https://www.realized1031.com/glossary/delayed-exchange) ### [Depreciation](https://www.realized1031.com/glossary/depreciation) Depreciation, in our context, refers to the allocation of an asset’s cost over the timeframe of its “useful life”, or duration for which it will be useful [Read More](https://www.realized1031.com/glossary/depreciation) ### [Depreciation Recapture](https://www.realized1031.com/glossary/depreciation-recapture) Depreciation recapture is the USA Internal Revenue Service (IRS) procedure for collecting income tax on a gain realized by a taxpayer when the taxpayer disposes of an asset [Read More](https://www.realized1031.com/glossary/depreciation-recapture) ### [Escrow Agent](https://www.realized1031.com/glossary/escrow-agent) Escrow agent is an entity that has fiduciary responsibilities in the transfer of property from one party to another. The escrow agent acts as a custodian of [Read More](https://www.realized1031.com/glossary/escrow-agent) ### [Exchange Accommodation Titleholder (EAT)](https://www.realized1031.com/glossary/exchange-accommodator-titleholder-eat) Used when completing a reverse exchange, an Exchange Accommodation Titleholder (EAT) is an unrelated party who holds legal title to either [Read More](https://www.realized1031.com/glossary/exchange-accommodator-titleholder-eat) ### [Exchange Accommodator Titleholder (EAT)](https://www.realized1031.com/glossary/exchange-accommodator) For Exchange Accommodator Titleholder see Accommodator. [Read More](https://www.realized1031.com/glossary/exchange-accommodator) ### [Exchange Agreement](https://www.realized1031.com/glossary/exchange-agreement) A written agreement between the exchanger and the Qualified Intermediary (QI) defining the transfer of the relinquished property, the ensuing purchase of the replacement property, and the restrictions on the exchange proceeds during the exchange period. [Read More](https://www.realized1031.com/glossary/exchange-agreement) ### [Exchange Period](https://www.realized1031.com/glossary/exchange-period) Exchange period, under IRC Section 1031, is when an exchanger or taxpayer executing a delayed exchange has 180 calendar days from the closing date of the sale [Read More](https://www.realized1031.com/glossary/exchange-period) ### [Exchange Proceeds](https://www.realized1031.com/glossary/exchange-proceeds) Exchange proceeds are cash proceeds from a transfer of relinquished property held in a qualified escrow account set up by a qualified intermediary whereby the funds [Read More](https://www.realized1031.com/glossary/exchange-proceeds) ### [Exchanger](https://www.realized1031.com/glossary/exchanger) Exchanger is the taxpayer or owner of the property or properties being exchanged during a tax deferred exchange (aka 1031 exchange or like-kind exchange). [Read More](https://www.realized1031.com/glossary/exchanger) ### [Held for Investment](https://www.realized1031.com/glossary/held-for-investment) Properties held for investment purposes can be any property or asset that are acquired and held for income production (rental or leasing activities) or for growth in value (capital appreciation). In order to qualify for tax-deferred treatment, property must have been held for investment or for business use. Property held for resale (e.g. inventory such as for-sale condo units) typically will not qualify for tax-deferred treatment. [Read More](https://www.realized1031.com/glossary/held-for-investment) ### [Identification Period](https://www.realized1031.com/glossary/identification-period) Identification period, under IRC Section 1031, an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date of the sale of their [Read More](https://www.realized1031.com/glossary/identification-period) ### [Intermediary](https://www.realized1031.com/glossary/intermediary) Intermediary is an entity that acts as the middleman between two parties in a financial transaction. [Read More](https://www.realized1031.com/glossary/intermediary) ### [Like-Kind Exchange](https://www.realized1031.com/glossary/like-kind-exchange) A method of deferring capital gains taxes on the sale or disposition of an asset held for business or investment purposes by exchanging the asset, [Read More](https://www.realized1031.com/glossary/like-kind-exchange) ### [Like-Kind Property](https://www.realized1031.com/glossary/like-kind-property) Upon the sale of an investment property, capital gains may be deferred by completing a 1031 exchange provided that the investor purchases [Read More](https://www.realized1031.com/glossary/like-kind-property) ### [Partial 1031 Exchange](https://www.realized1031.com/glossary/partial-exchange) To the extent less than 100% of the proceeds of a relinquished property are reinvested, the difference will result in mortgage boot and/or cash boot. [Read More](https://www.realized1031.com/glossary/partial-exchange) ### [Real Estate Rollover](https://www.realized1031.com/glossary/real-estate-rollover) A real estate rollover is a type of property exchange that allows the investor to roll their gains over into like-kind property. This transaction is called a 1031 exchange. Because gains from the relinquished property are rolled into the acquired property, taxes on those gains are deferred. [Read More](https://www.realized1031.com/glossary/real-estate-rollover) ### [Realized Gain](https://www.realized1031.com/glossary/realized-gain) Realized gain is the amount of gain that the investor made from the sale of an asset. It is calculated as the net sales price received (sales price of the asset less any [Read More](https://www.realized1031.com/glossary/realized-gain) ### [Recognized Gain](https://www.realized1031.com/glossary/recognized-gain) Recognized gain is the taxable portion of realized gains arising from the sale of an asset or assets. Recognized gains are typically less than realized gains due to [Read More](https://www.realized1031.com/glossary/recognized-gain) ### [Regulation D Offering](https://www.realized1031.com/glossary/regulation-d-offering) A Regulation D Offering is a Securities and Exchange Commission (SEC) regulation governing private placement exemptions that allows companies to raise capital through [Read More](https://www.realized1031.com/glossary/regulation-d-offering) ### [Related Parties Transaction](https://www.realized1031.com/glossary/related-parties-transaction) Related parties transaction is a business deal or arrangement between two parties who are joined by a personal or other relationship prior to the deal. [Read More](https://www.realized1031.com/glossary/related-parties-transaction) ### [Relinquished Property](https://www.realized1031.com/glossary/relinquished-property) In a tax deferred (aka 1031 exchange or like-kind) exchange, the property being sold or disposed of is referred to as the relinquished property. The relinquished property is on the opposite side of a 1031 exchange to the replacement property. [Read More](https://www.realized1031.com/glossary/relinquished-property) ### [Replacement Property](https://www.realized1031.com/glossary/replacement-property) Replacement property, during a tax deferred (aka 1031 exchange or like-kind) exchange, is the property being purchased or acquired. [Read More](https://www.realized1031.com/glossary/replacement-property) ### [Replacement Property Interests (RPI)](https://www.realized1031.com/glossary/replacement-property-interests-rpi) Replacement Property InterestsTM is the term Realized uses to describe equity ownership in large properties by multiple 1031 exchange investors through Delaware Statutory Trusts (DST) and Tenant-In-Common (TIC) [Read More](https://www.realized1031.com/glossary/replacement-property-interests-rpi) ### [Reverse Exchange](https://www.realized1031.com/glossary/reverse-exchange) A reverse exchange Refers to method of executing a tax-deferred exchange (aka 1031 exchange or like-kind exchange) in which the exchanger or taxpayer acquires the [Read More](https://www.realized1031.com/glossary/reverse-exchange) ### [Safe Harbor](https://www.realized1031.com/glossary/safe-harbor) Safe harbor is a statutory or regulatory provision that provides protection from a penalty or liability. In the context of a 1031 exchange, safe harbor refers to any one of [Read More](https://www.realized1031.com/glossary/safe-harbor) ### [Same Taxpayer Provision](https://www.realized1031.com/glossary/same-taxpayer-provision) A requirement in a 1031-exchange transaction, the same taxpayer provision states that the taxpayer who owned the relinquished property must be the same taxpayer who takes ownership of the replacement property. This ensures that the taxpayer’s basis is carried over into the new property, and that there is a continuity of deferral. [Read More](https://www.realized1031.com/glossary/same-taxpayer-provision) ### [Simultaneous Exchange](https://www.realized1031.com/glossary/simultaneous-exchange) See Concurrent Exchange. [Read More](https://www.realized1031.com/glossary/simultaneous-exchange) ### [Three Property Rule](https://www.realized1031.com/glossary/three-property-rule) The Three Property Rule is defined under IRC Section 1031, which states that an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date of the sale of their relinquished property to formally identify a replacement property or properties. 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