Protecting Pennsylvania Property Since 1984

D

Declaration - The document that establishes a condominium, cooperative, or planned community and describes the most important property rights of the unit owners.

Dedication - The setting aside of certain land by the owner and declaring it to be for public use, e.g., streets, sidewalks, and parks in a development.

Deed - An instrument for conveying real estate.

Deed of trust - A form of security instrument for mortgage loans.

Deed restriction - A covenant contained in a deed imposing limits on the use or occupancy of the real estate, or the type, size, purpose or location of improvements to be constructed on it.

Default - A failure to meet legal or contractual obligations.

Defect - An imperfection or deficiency.

Deferral - The substitution of, or carrying over of, the basis of the taxpayer's relinquished property to the replacement property, making any necessary adjustment for additional consideration paid.

Deficiency judgment. - When the proceeds from a foreclosure sale are less than the amount due on the debt.

Delayed Exchange/Deferred Exchange (aka Starker Exchange) - The taxpayer disposes of the relinquished property on one day, and then has up to 180 days from that date (or the due date of taxpayer's income tax return, including extensions, whichever event occurs first) to acquire the replacement property. The transaction must be an exchange of property for property, and not a sale of property for money that is used to acquire replacement property. An exchange occurs when the taxpayer (through the use of a Qualified Intermediary) conveys relinquished property to the same party from whom the taxpayer acquires the "replacement property."

Advantages of a Deferred Exchange:

  • More completed transactions,
  • Less stress because you do not have to close concurrently,
  • Fewer contingencies; the taxpayer has already disposed the relinquished property prior to acquiring the replacement property,
  • Complex exchanges are broken into simpler parts; especially helpful in multi-property and/or multi-state exchanges, and
  • Utilizes the expertise, experience and scrutiny of a Qualified Intermediary. (Although not a substitute for a competent tax advisor regarding tax matters.)

Depreciation - Loss in value due to ordinary wear and tear, destructive action of the elements, or economic obsolescence.

Depreciation Recapture - Deductions taken in excess of straight-line depreciation under Section 1250 I.R.C. where there is an exchange into a property of lower value, or where the exchange consists partly of cash and property not of a like kind. The depreciation provisions of Section 1250 require a recapture tax rate rather than the capital gain tax rate.

Devise - A gift of real estate made by a will. See also grantor and heir.

Discount point(s) - The amount of money the borrower or seller must pay the lender to get a mortgage at a stated interest rate.

Dominant estate - The property benefited by an easement.

Draw - Disbursement of a portion of the mortgage loan.

Contact

Tara E. Stitz