Accommodator
Often referred to as the "Accommodating Party," this person is either the seller or buyer who serves as an intermediary for the exchange, which would not otherwise be necessary to accomplish the exchanger's goals. (Also refered to as a "Qualified Intermediary.")

Basis
Also called "Adjusted Basis. The 'book value" of the property. Basis or adjusted basis is arrived at by taking the property's cost, adding the costs of improvements, and subtracting the depreciation deductions taken over the years that the property has been owned.

Boot
Refers to a consideration or property which is not eligible for a 1031 exchange. Section 1031 lists several kinds of 'boot" property, but most common types of boot are cash, net mortgages, indebtedness relief, partnership interests, and exchanger carry back financing.

Buyer
The person who wants to buy the exchanger's property.

Capital Gains
Results from the disposition of a capital asset such as real estate, stocks, or bonds.

Capital Gains Tax
Gains on properties are taxed at 15% of the gain, In addition, an additional 5% must be paid on the amount of depreciation accumulated on the asset. This is generally referred to as "recapture." Refers to the tax paid on the sale of a capital asset.

Delayed Exchange
Also called a "Starker Exchange." The disposition of the exchange property and the acquisition of the target property are not simultaneous. The exchange property is disposed of in the first step and the target property is acquired in a later step.

Direct Deeding
The practice used in tax deferred exchanges whereby the deed to the target property bypasses the accommodator or facilitator and goes directly to the exchange. All of the closing documents and Settlement Statements read as though the facilitator Qualified Intermediary is taking title to the target property.

Exchanger
The person who wants to complete a tax deferred exchange.

Facilitator
Typically, a corporation that helps structure and document the exchange for a fee. The facilitator's role will vary with the type of exchange. The new name approved by the Internal Revenue Service now is a "Qualified Intermediary." You may hear the term "facilitator" and "Qualified Intermediary" used interchangeably. They mean exactly the same.

Improvement Exchange
Refers to a 1031 exchange where the target property must have its value enhanced to equalize the equity in the exchange property.

Like-Kind Property
Like-Kind property refers to property used for productive use in a trade or business or held as an investment which is eligible property for a 1031 exchange.

Qualified Intermediary (QI)
Normally a corporation that assists the exchanger by properly documenting the exchange and does so for a fee. Also known as a facilitator. New regulations from the IRS have formally approved the use of a facilitator.

Reverse Starker
Refers to a 1031 exchange where the target property is acquired before the exchange property is disposed of by the exchanger. Normally, a facilitator or other third party will hold title to (warehouse) the target property until the disposition of the exchange property can be completed. (Guidelines from IRS were made available in late 2000.)

Seller
A person or entity who wants to sell his property and is willing to pay the capital gains tax. (Note: If you engage 1031 you are the "exchanger").

Sequential Deeding
Refers to the practice used in tax deferred exchanges whereby the deed to the target property goes first to the accommodator or facilitator and then the accommodator or facilitator deeds the target property to the exchange. All of the closing documents, including the documents of conveyance, reflect the title to the target first passing to the accommodator or facilitator.

Simultaneous Exchange or Simultaneous Closing
The disposition of the exchange property and the acquisition of the target property are interdependent: one cannot happen without the other.

1031 Exchange Or Tax Free Exchange Or Tax Deferred Exchange
The term for a transaction where an exchanger disposes of his property and postpones the tax on the gain from that disposition. Improperly called a tax free exchange as the tax is only deferred or transferred to the new property acquired.