Glossary
This glossary provides clear definitions for common terms related to 1031 exchanges, DSTs, TICs, and other real estate investment strategies. It is designed to help investors quickly understand the language used throughout the exchange process and when reviewing potential replacement property options.
If you are researching tax-deferral strategies or comparing passive investment solutions, the definitions below can serve as a useful reference. Our goal is to make industry terminology easier to understand so you can move forward with greater clarity and confidence.
1031 Terms
Tax Deferred Exchange
A Tax Deferred Exchange, also known as a 1031 exchange, is a tax strategy used in the United States that allows an investor to defer paying capital gains taxes on the sale of an investment… Read More
Tax Straddling
Tax straddling, also known as income shifting, is a tax strategy used to manage and potentially reduce tax liabilities. It involves manipulating the timing of income and deductions to take advantage of differences in tax… Read More
Taxable Exchange
A taxable exchange in relation to the 1031 exchange industry refers to a transaction where the exchanged property does not fully meet the requirements set by Section 1031 of the Internal Revenue Code, resulting in… Read More
Taxpayer
A taxpayer in the real estate investment industry can be either an individual or an entity that bears the responsibility of paying taxes on the income generated from their real estate investments. Individual taxpayers could… Read More
Title Insurance
Title insurance is a specialized type of insurance that plays a critical role in the real estate investment industry. When a person invests in real estate, they essentially purchase the legal ownership, or “title,” of… Read More
Titleholder
In the realm of a 1031 exchange in real estate transactions within the United States, a titleholder, often referred to as a Qualified Intermediary (QI) or Exchange Facilitator, plays a significant role in facilitating the… Read More
Trustee
In the realm of real estate investments, particularly involving Tenancy in Common (TIC) and Delaware Statutory Trust (DST) structures, as well as 1031 exchanges, the term trustee carries significant responsibilities. The trustee is typically an… Read More
UBIT (Unrelated Business Income Tax)
Unrelated Business Income Tax (UBIT) is a type of tax that applies to income earned from activities that are unrelated to the tax-exempt purpose of an organization. While UBIT can apply to various industries, in… Read More
UP-REIT (Umbrella Partnership Real Estate Investment Trust)
An Umbrella Partnership Real Estate Investment Trust (UPREIT) is a structure that allows property owners to exchange their real estate for an interest in a partnership that is typically controlled by a Real Estate Investment… Read More
Vacation Property
A Vacation Property in the context of the 1031 exchange industry refers to a piece of real estate that is used primarily for the owner’s personal enjoyment during vacations or holidays. However, to qualify for… Read More
Wraparound Mortgage
A wraparound mortgage is a type of financing tool used in real estate transactions. This form of financing arrangement is an alternative to traditional mortgages and is often utilized when a seller finances the purchase… Read More