1031 Exchange Glossary
Clear meanings for the terms used in Section 1031 exchange planning and 1031Pro educational content.
Terms and meanings
Use one term with one consistent meaning.
These definitions explain how this website uses common exchange terms. The Internal Revenue Service (IRS), applicable law, and transaction documents control.
Use the complete term before you use a short form. Ask your tax and legal advisors how a term applies to your transaction.
| Term | Meaning |
|---|---|
| taxpayer | The person or entity that transfers and receives property in the exchange. |
| relinquished property | The real property that the taxpayer transfers. |
| replacement property | The real property that the taxpayer receives. |
| Qualified Intermediary | A person that meets the applicable requirements and signs a written exchange agreement with the taxpayer. |
| QI | The approved short form of Qualified Intermediary after the full term first occurs. |
| delayed exchange | An exchange in which the taxpayer transfers the relinquished property before receipt of replacement property. |
| reverse exchange | A transaction in which the replacement property comes before the transfer of relinquished property. |
| Exchange Accommodation Titleholder | The person that holds qualified ownership under a qualified exchange accommodation arrangement. |
| EAT | The approved short form of Exchange Accommodation Titleholder after the full term first occurs. |
| Qualified Exchange Accommodation Arrangement | The written safe-harbor arrangement described in Revenue Procedure 2000-37, as modified. |
| QEAA | The approved short form of Qualified Exchange Accommodation Arrangement after the full term first occurs. |
| Special Purpose Entity | An entity that can hold the parked property for a specified transaction. |
| SPE | The approved short form of Special Purpose Entity after the full term first occurs. |
| improvement exchange | An exchange structure that includes production or improvement of replacement property before the taxpayer receives it. |
| identification period | The 45-day period that applies to identification in a deferred exchange. |
| exchange period | The period that ends on the applicable 180-day date or the earlier tax-return due date. |
| boot | An informal tax term for money or non-like-kind property that can cause recognized gain. |
| fair market value | The value standard used in the IRS rules and examples. |
| actual receipt | Receipt of money or property by the taxpayer. |
| constructive receipt | A tax rule that can treat money or property as received when the taxpayer controls it. |
| disqualified person | A person that the federal deferred-exchange rules do not permit to act as the Qualified Intermediary. |
| identification | The signed written designation of proposed replacement property. |
| identification method | A federal method that limits the number or value of identified properties. |
| exchange funds | Sale proceeds that remain inside the approved exchange structure. |
| funds structure | The agreements, accounts, and controls for exchange funds. |
| sale proceeds | The money from the relinquished-property transfer. |
| parked property | Property for which an EAT holds qualified ownership under a QEAA. |
| title | The legal ownership record for real property. |
| escrow | The transaction process that follows approved closing and funds instructions. |
| lender | A person or organization that provides or approves transaction financing. |
| settlement statement | The closing record that shows transaction charges, payments, and funds. |
| adjusted basis | The tax basis after applicable increases and decreases. |
| realized gain | Gain calculated before the federal recognition limits apply. |
| recognized gain | The part of realized gain that the taxpayer must report as taxable. |
| related person | A person or entity that meets the applicable federal relationship rules. |
| tax-return due date | The federal filing due date, including a valid extension. |
Use definitions as a starting point.
These definitions give general information. They do not give tax, legal, accounting, investment, or financial advice.