Principle involved in the tax-deferred exchange who benefits from the exchange. Also know as the taxpayer, investor.
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Relinquished Property:
Property held by the taxpayer which is transferred in an exchange. Also known as phase 1, downleg.
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Replacement Property:
Property which will be received by the taxpayer in exchange for the relinquished property. Also known as phase 2, upleg.
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Qualified Intermediary:
The party that enters into a written agreement with the taxpayer (the exchange agreement) and, as required by the exchange agreement acquires the relinquished property from the taxpayer, transfers the relinquished property to the buyer and holds the sale proceeds. Within 180 days from the transfer of the relinquished property the intermediary acquires the replacement property and transfers it to the taxpayer. Also know as facilitator, accommodator.
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Simultaneous Exchange:
Exchange transaction where properties being conveyed and acquired occur at the same time.
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Delayed Exchange:
Time delay between the closing of the relinquished property and the replacement property (maximum 180 days). Also referred to as the Starker Exchange.
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Disqualified Party:
Generally a person who has acted as the taxpayer's employee, attorney, accountant, investment banker or broker or real estate agent or broker within a two year period, certain relatives etc. This party is disqualified from acting as an intermediary for the taxpayer.
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Boot:
Something that is not Like Kind that is given in addition to; such as cash or personal property. Boot generally creates a taxable event.
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tax or legal advice. You should consult your tax or legal advisor about your specific circumstances.