An accredited investor is eligible to buy certain unregistered, private securities.Thedesignation is based on financial resources, sophistication, or qualifying professional credentials.

For an individual in the U.S., common ways to qualify include annual income above $200,000 in each of the prior two years ($300,000 jointly with a spouse), with an expectation of maintaining that level in the current year; or net worth above $1 million alone or jointly with a spouse, excluding the primary residence. Certain investment professionals with recognized credentials, knowledgeable employees of private funds, and specified institutions or entities can also qualify.

Accredited status is a legal eligibility threshold, not a guarantee that an investment suits a person’s objectives, liquidity needs, or risk tolerance. The issuer of the private offering generally verifies investor eligibility rather than the SEC issuing an individual approval. DEFINED IN RULE 501OF Regulation D.

The value of a property for tax purposes. Takes into consideration added value for capital improvements and decreased by the amount of depreciation.

The money or the fair market value of “other property” received by the taxpayer in an exchange. Subject to the extent there is a capital gain. Examples of boot may include: cash boot, mortgage boot, and personal property

Constructive receipt means the funds are made available to the taxpayer in a way that can break the deferred exchange treatment. That is one reason exchange structure matters so much. (IRS)

This is the period in which replacement property must be received, generally by the earlier of 180 days after transfer or the due date of the tax return, including extensions. (IRS)

The property owner aiming to defer capital gain by utilizing a 1031 exchange.

This is the 45-day period after the transfer of the relinquished property during which replacement property must be identified. (IRS)

Like-kind real property is property of the same nature or character, even if it differs in grade or quality. (IRS)

(PPM) A legal offering document that contains relevant

Objectives, disclosures, risks, and terms to aid investors in making informed investment decisions. Contains all details of the investment, procedures for investing, securities offering in detailed analysis – sometimes maybe called an offering document.

A qualified intermediary is a third party used in many exchanges to help facilitate the transaction and avoid constructive receipt of the sale proceeds by the taxpayer. (IRS)

Amount of the realized gain that is subject to tax. In a fully tax deferred 1031 Exchange, no gain is recognized.

The relinquished property is the property you give up in the exchange.

The replacement property is the like-kind property you receive, or plan to receive, in the exchange. In a deferred exchange, it is received after the transfer of the relinquished property. (IRS)

A 1031 exchange in which the replacement property must be

Purchased before the relinquished property is sold. May also take place when improvements must be made to the replacement property before it can be acquired

By the exchanger. Generally more complex than a forward 1031 exchange

The company /party offering the property asset available for sale. The sponsor

Handles everything from purchasing the property to building the financials, to handling of the property management. The sponsor will sell fractionalized interests to individual investors.