Protecting Pennsylvania Property Since 1984
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| "Back Leg" Reverse Exchange - The Exchange Accommodation Titleholder (EAT) acquires and holds title to the replacement property and "parks" this replacement property for up to 180 days, which allows the taxpayer to find and transfer the relinquished property to a third party buyer. The taxpayer can "use" (lease) the property that is parked with the EAT. |
Back title letter (also called “back title certificate” or “starter”) - When titles previously have been examined up to a certain date by reliable examiners, title companies sometimes give subsequent examiners of such titles a letter that sets forth the condition of the title at the time of the previous examination and authorizes them to begin their subsequent examination with the terminal date of the previous examination. |
"Baird" Simultaneous Exchange (1962) - This method of completing the transaction utilizes the seller of the replacement property (Party B) as the accommodator. On the day of closing, A will transfer the relinquished property to B, the replacement property owner, in exchange for the replacement property. Party A has what they want; however, Party B has the relinquished property, which B does not want. Party B must now sell the A property to C for cash. In this way, B receives the cash directly from C and A has no actual or constructive receipt of the funds. |
Balloon note - A promissory note with amortization payments scheduled for a long term, usually 30 years, but maturing in a shorter term, often five to seven years. It requires a substantial final balloon payment for the remaining principal. |
Bankruptcy - A federal court proceeding under the U.S. bankruptcy laws where an insolvent debtor either has its estate liquidated and its debts discharged or is allowed to reorganize its affairs under the protection of the bankruptcy court. |
Base title (also called a “basic title”) - Title to an area or tract out of which parts are subsequently conveyed or from which a subdivision or development is made. |
Basis - The starting point for determining gain or loss in any transaction. In general, basis is the cost of the taxpayer's property. |
Basis in the Replacement Property - The basis of the taxpayer's relinquished property with appropriate adjustments. |
Beneficiary (of a trust) - A person designated to receive benefits from a trust estate. |
Bond - (1) A surety insurance agreement under which one party agrees to pay, within stated limits, financial loss caused to another by specified acts or defaults of a third party. (2) An interest-bearing security evidencing a long-term debt, issued by a government or corporation, and sometimes secured by a lien on property. |
Boot - All property given or received in an exchange which is not like kind. In an exchange of real property, any consideration received other than real property is non-like kind and is considered boot. (See also cash boot and mortgage boot.) |
Building codes - Local or state laws that control accepted building and construction ractices. |
Building lines (also called “setback lines”) - Lines fixed at a specified distance from the front or sides of a lot or at a certain distance from a road or street. No building on the lot may project outside the area defined by the building lines. |
Build-To-Suit (Construction) Exchange - A build-to-suit (or construction) exchange allows improvements or repairs to be made on a replacement property before it is transferred to the taxpayer. |
Buyer - The person who wants to acquire the exchanger's property. |
