Robert Farnsworth

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.
Exchanger The client or taxpayer that takes advantage of the exchange process to defer paying capital gains taxes.
Delayed Exchange
An exchange that takes place with time (a day up to 180 days) between giving up the relinquished property and acquiring the replacement property.
Simultaneous Exchange
An exchange that takes place on the same day. Both sale and acquisition properties are exchanged on the same day. Much more popular before the Starker court case.
Starker Exchange
A name derived from the Starker Court Case in 1979 that is used to describe a delayed exchange. The first case that challenged exchanges by receiving party over a period of 2 years.
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.
Facilitator
Middleman, or qualified intermediary, that is used to insure a properly structured exchange.
Relinquished Property
The initial property exchanged; Phase I property; down-leg.
Replacement Property
The property acquired or exchanged for; Phase II property, up-leg.
Sequential Deeding
An exchange transaction that takes place where the title to the relinquished property flows from the exchanger 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 exchanger.
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 regulations.
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, real estate agent, or escrow officer. 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.