Term Glossary
An exchanger has 180 calendar days from the closing date of the property for sale to close on the exchanged or replacement property, under IRC Revenue Code section 1031
Also known as a Like-Kind Exchange, transfers that are governed by the IRS, and exchange real estate, or other assets, to acquire a new similar property, or other asset, for the purpose of deferring multiple taxes
Taxes deferred include capital gains, depreciation recapture, federal, state, and local
Individuals that has a high level of professional finance knowledge, experience, or certifications and pass specific income requirements
Income requirements are currently a $1 million net worth excluding primary residence, or an annual income of $200,000 or $300,000 for a spousal couple
Tax liability generated from violating IRS 1031 exchange guidelines in which investors must pay capital gains, depreciation recapture, federal, state, and local taxes at the time of the property’s sale
An increase in value of an asset that generates a tax when the asset is sold on the gain above the cost basis
A legal entity set under Delaware statutory law allowing investors to partake in a pro rata interest in the assets the trust holds selected by a sponsor
Tax that has been deferred due to a depreciating asset realized on one’s income. Once the asset is sold, one might be subject to pay the taxes written off by depreciation from the sold asset
Regarding real estate, an investment time horizon governed by the sponsor from the open investment period to the exit
While no technical definition exists, generally they are properties that are of large enough size to incentivize attention from sizeable investor groups
Properties that are the same nature or character, but can differ in quality or grade
Investor’s proportional, capital interest in the real estate vehicle or DST which directly owns the assets
A real estate company that coordinates the searching, acquiring, and managing of a property/properties
A legal arrangement where 2 or more investors own ownership in real estate where investors can own different percentages of the property
Owners can transfer ownership of the property to anyone upon death
Zero-coupon structures are investment structures that do not make any passive disbursements during the investment period and returns a realized gain at the maturity date
Generally, in the case of DSTs, the investment term is 10 years
