Indirect Costs

Definition:
Development costs other than direct material or direct labor costs including administrative and office expenses, financing costs and property taxes.

Tax Savings

Definition:
The deduction a taxpayer can take on their tax form for interest paid on a home mortgage. The amount of money that the homeowner is not required to pay the government in taxes because he or she owns a home.

Tax Lien

Definition:
(1) A lien for nonpayment of property taxes. Attaches only to the property upon which the taxes are unpaid. (2) A federal income tax lien. May attach to all property of the person owing the taxes.

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Terms & Glossary about 1031

Taxes

Definition:
As a part of PITI, the amount of the monthly mortgage payment which does not include the principal, interest, and insurance.

Operating Expenses

Definition:
The actual cost of operating income - producing property, including utilities and similar day-to-day expenses, taxes, insurance and reserves for the replacement of items that wear out.

Tax Deed

Definition:
A written document conveying title to property repossessed by the government due to default on tax payments.

Property Tax

Definition:
The amount which the state and/or locality assesses as a tax on a piece of property.

Like-Kind Property

Definition:
A tax term used in certain real property exchanges. Property must be exchanged for like-kind property and the tax consequences postponed pursuant to Section 1031 of the Internal Revenue Code.

Indirect Costs

Definition:
Development costs other than direct material or direct labor costs including administrative and office expenses, financing costs and property taxes.

Did You Know ?

There are some things that Section 1031 doesn't apply to. Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.

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