In real estate, a dealer (tax) is an individual or entity that buys and sells property for their own account, with such property considered as inventory. Consequently, any gains from the sale are treated as ordinary income for tax purposes.
A legal document transferring real estate from one party to another as a gift, with no monetary consideration involved.
Inheritance tax, a type of tax imposed on those who inherit property from a decedent, is based on the property's value. Unlike estate tax, which is based on the total value of the deceased's estate, the inheritance tax is levied on the shares received by individual heirs.
Mortgage relief involves the alleviation or settlement of mortgage debt. This can occur through the assumption of mortgage by another party or the repayment of debt. In tax-free exchanges, mortgage relief can be considered as boot received and could have tax implications.
Recapture of depreciation is a tax provision where the IRS recovers depreciation deductions upon the sale of an asset, often leading to significant tax implications for the property owner.
A reserve fund is an account set aside to cover future building maintenance expenses, mortgage obligations, and other forthcoming financial requirements. These funds can be mandated by lenders, such as escrows, to ensure timely payments for property-related costs.
