Tax Deferral:
Everything You Need to Know

1031 Exchange Overview -
What is a 1031 Exchange?
Maximize your real estate investment potential with the 1031 Exchange Rules. We cover the specifics of these rules, the benefits of a 1031 exchange, and the different types of exchanges available. Learn about qualifying properties, crucial timelines, financial implications, and the role of qualified intermediaries.
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1031 Exchange Rules |
1031 Exchange Rules & Checklist
A 1031 exchange can be an incredible tool for real estate investors to reduce their tax liability. We demystify the rules required to qualify and successfully complete a like-kind exchange.
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Accounting Terms

Explore 1,000+ terms with definitions, sample usage, and examples.
Accelerated Depreciation
A method of depreciation that allows for greater depreciation expense in the early years of an asset's life and less in the later years, compared to straight-line depreciation.
Accumulated Depreciation
The total depreciation recorded for an asset or group of assets from the time they were placed in service until the date of the financial statement or tax return. This amount is recorded as a contra account to the related asset account, reducing the asset's book value on the balance sheet.
Alternative Minimum Tax (AMT)
A federal tax designed to ensure that individuals, estates, trusts, and corporations with significant economic income pay a minimum level of income tax, regardless of deductions, exemptions, or other tax breaks they may otherwise be able to claim.
An increase in the value of an asset, such as a stock, bond, commodity, or real estate, over a period of time.
A legal process governed by federal statute in which an insolvent debtor's assets are liquidated and managed by a court-appointed trustee to satisfy debts to the greatest extent possible.
A bond is a type of long-term promissory note, issued as a security under federal or state laws, where the issuer borrows funds from the bondholder and agrees to pay back the principal amount at a specified maturity date, along with periodic interest payments.
Book Value
The net amount that an asset or liability is recorded on the balance sheet, also known as the carrying value. It is calculated by deducting accumulated depreciation, amortization, or impairments from the original cost of the asset.
In financial and tax contexts, 'boot' refers to any additional cash or property added to a transaction to balance the value of exchanged properties, typically in transactions that are otherwise nontaxable.
Capital Expenditure
An outlay of money to acquire or improve long-term assets such as buildings, machinery, or equipment, which are intended to be used in the operations of a business and are not intended for resale.
Capital Gain
A capital gain is the profit realized from the sale or exchange of a noninventory asset, such as stocks, real estate, or other investments, where the sale price exceeds the asset's original purchase price. These gains are usually treated favorably under tax laws, often at a lower rate than ordinary income.
Carrying Value
The net amount at which an asset or liability is valued on a company's balance sheet, after accounting for depreciation, amortization, and impairment costs, as well as accumulated liabilities. Also known as book value.
An entity or individual that buys and sells securities for its own account, acting as a principal in the transaction. Dealers set bid prices for buying securities and ask prices for selling, thus making markets and taking on the associated risks.
Debt Instrument
A financial document representing a loan made by an investor to a borrower, which includes the terms of repayment and, typically, interest payments.
Debt-to-Equity Ratio
A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. It is calculated by dividing total liabilities by shareholders' equity.
A non-cash accounting expense that allocates the cost of acquiring long-term assets over their useful life, representing the asset's wear and tear, obsolescence, or other declines in value over time.
The act of transferring money, property, or services in return for a combination of these items.
An accounting method of valuing inventory under which the costs of the first goods acquired are the first costs charged to expense, commonly known as First In, First Out.
Face Value
The nominal value of a security or financial instrument as stated by the issuer, which is the amount due to be paid at maturity. It does not fluctuate with market value.