Spectrus – Investment Real Estate Glossary – B
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- Basis in the replacement property
- In a 1031 exchange, the deferral of the tax on the gain is accomplished by requiring the taxpayer to carryover (substitute) the basis of the relinquished property to the replacement property with suitable adjustments in the event additional consideration is paid.
- Bear market
- An extended period of falling value of the overall market, accompanied by anticipation of negative economic activity.
- Boot
- "Unlike" property included in a like-kind exchange. Example: In an exchange of property under Section 1031 of the Internal Revenue Code, Collins exchanges her warehouse worth $100,000 and receives Baker's land worth $125,000. Collins pays $15,000 cash and a car worth $10,000 in order to equalize the values of the properties exchanged. The car and cash are boot.
- Broker
- A person who, for a commission or a fee, brings parties together and assists in negotiating the sale of an asset between them.
- Bull market
- An extended period of rising value of the overall market.
Please visit the Spectrus FAQ page for more answers to your investment real estate and 1031 exchange questions.
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