Adjusted Basis - The original basis plus improvement costs minus the depreciation of the property.

Boot - Any assets received from an exchange that is not "like-kind." The most common types are "Cash Boot" and "Mortgage Boot." All Boot are taxable.

Cash Boot - Any cash an exchangor receives upon the closing of the relinquished property is taxed.

Constructive Receipt - A term that refers to the Exchangor having unrestricted control of the equity from property sold. Constructive Receipt will invalidate an exchange.

Equity - The proceeds from the sale of a property.

Exchange Period - The 180-day window in which the Exchangor has to complete an exchange.

Exchangor - The owner of the investment property looking to make an exchange.

Fair Market Value - The likely selling price as defined by the market at a specific point in time.

Identification Period - The time period that begins upon the close-of-escrow of the relinquished property. During this 45-day period, the exchangor must identify the replacement property.

Like-Kind Property - The properties involved in an exchange must be similar in nature or characteristics.

Original Basis - The purchase price of a property. It is used to calculate capital gains or losses for tax purposes.

Personal Property - Any property belonging to the Exchangor that is non-real estate related.

Phase I - The process in which the relinquished property is sold and all respective paper work for that process are done. This process is also known as the "down-leg" of the exchange process.

Phase II - The process in which the replacement property is bought and all the respective paperwork for that process are done. This process is also known as the "up-leg" of the exchange process.

Qualified Intermediary - A third party that helps to facilitate the exchange. Sometimes refers to as "facilitator," or "accommodator."

Relinquished Property - The property that you sell when making an exchange.

Replacement Property - The property that you acquire when making an exchange.