The following terms are the official language used when referring to 1031 Exchanges.

Exchange:  The giving of one thing for another.  Under Section 1031, property held for productive use in a trade or business is exchanged for like-kind property.

Like-Kind:  Property that would qualify for a like-kind exchange under Section 1031 of the Internal Revenue Code.  Any real property held for investment can be exchanged for other investment property.

Exchangor:  The client or taxpayer that takes advantage of the exchange process to defer paying capital gains taxes.

Facilitator:  Middleman, or Qualified Intermediary, that is used to insure a properly structured exchange.

Relinquished Property:  The initial property exchanged.

Replacement Property:  The property acquired or exchanged for.

Simultaneous Exchange:  An exchange that takes place on the same day.  Both sale and acquisition properties are exchanged on the same day.

Delayed Exchange:  An exchange that takes place with time (a day up to 180) between giving up the relinquished property and acquiring the replacement property.

Reverse Exchange:  An exchange where the replacement property is acquired before the sale of the relinquished property.

Identification:  Within 45 days after the relinquished property is exchanged, a property must be designated as a possible replacement property in writing to the facilitator.  One of the identified properties must be acquired within 180 days of the initial exchange.

180 Days:  Total number of days allowed to complete a delayed exchange.  If a property is exchanged at such a time that it comes time to file taxes and the exchange has not been completed, the exchanger will file for an extension.

Sequential Deeding:  An exchange transaction that takes place where the title to the relinquished property flows from the exchangor to the facilitator and then to the buyer.  On the replacement property, the title flows from the seller to the facilitator and then to the exchangor.

Direct Deeding:  An exchange where the title does not pass through the facilitator as described in Sequential Deeding.  The facilitator receives an equitable interest in the property.  This method was approved by the IRS in the new