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1031 Exchange Terms you
Need to Know
Title | Description |
|---|---|
Partnership Interest Exchange | A specialized 1031 Exchange involving the exchange of a partnership interest rather than direct real estate. |
Personal Property | Tangible assets such as equipment, furnishings, and fixtures, which are generally not considered like-kind property for a 1031 Exchange. |
Portfolio Diversification | A strategy that involves exchanging multiple smaller properties for a single larger property to achieve better portfolio diversification. |
Portfolio Property | A collection of investment properties held by an investor that can be sold in whole or in part through a 1031 Exchange. |
Qualified Indicia of Ownership | Proof of ownership of the replacement property during the exchange period, which may be required by the IRS. Please feel free to incorporate these terms into your glossary to provide a comprehensive resource for your website visitors. |
Qualified Intermediary (QI) | An independent third party responsible for facilitating the 1031 Exchange and holding the proceeds from the sale of the relinquished property until the replacement property is acquired. |
Qualified Intermediary Agreement | A legal contract between the exchanger and the qualified intermediary that outlines the roles and responsibilities of each party in the exchange. |
Basis | The original cost of an asset, used to calculate capital gains tax. In a 1031 Exchange, the basis of the relinquished property is carried over to the replacement property. |
Qualified Opportunity Fund (QOF) | An investment vehicle used in conjunction with 1031 Exchanges to invest in qualified opportunity zones, offering tax benefits. |
Qualified Opportunity Zone (QOZ) | A designated area that may offer tax benefits for investing capital gains in economically distressed communities. It can be combined with 1031 Exchanges in some cases. |
Qualified Use | The IRS requirement that both the relinquished and replacement properties must be held for qualified use in business or investment purposes to qualify for a 1031 Exchange. |
Qualified Use Period | The minimum required period that a property must be held for business or investment use to qualify for a 1031 Exchange, typically 24 months. |
Speak with an exchange consultant
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