Glossary Topic: 1031 Exchanges

A 1031 exchange in which the relinquished and replacement properties close on the same day.

Cash or non-like-kind property received in a 1031 exchange. Boot is taxable in the year of the exchange.

An entity that lets investors hold fractional interests in real estate; DST interests can qualify as like-kind replacement property.

The most common 1031 structure: the relinquished property sells first and the replacement is acquired within the 45/180-day deadlines.

A 1031 exchange in which proceeds fund construction or improvements on the replacement property.

Real property held for investment or business use. Nearly any U.S. investment real estate is like-kind to any other.

The independent party that holds sale proceeds and documents a 1031 exchange; the exchanger never touches the funds.

A 1031 exchange in which the replacement property is acquired before the relinquished property sells.

The window, starting at the sale of the relinquished property, in which an exchanger must identify potential replacement properties in writing.

The deadline to close on replacement property — 180 days from the relinquished sale or the tax-return due date, whichever comes first.