DSTs / 1031 Exchange Language Terminology The following is a partial list of definitions to assist with a basic understanding of DST/1031 Exchange terminology. For additional information, contact Northland Securities, your Qualified Intermediary, or your tax and legal advisors. Accredited Investor – A person or entity who is allowed to deal, trade, and invest in financial securities that may not be registered with financial authorities. They are entitled to this privileged access provided they meet one or more requirements regarding income, net worth, asset size, governance standard, or professional experience as defined in SEC Rule 501(a) of Regulation D. Identification Period – The period during which the Exchanger must identify a Replacement Property in the exchange. The Identification Period starts on the day the Exchanger transfers the first relinquished Property and ends at midnight on the 45th day thereafter. Exchange Period – The period during which the Exchanger must acquire Replacement Property in the exchange. The Exchange Period starts on the date the Exchanger transfers the first Relinquished Property and ends on the earlier of the 180th day thereafter or the due date (including extensions) of the Exchanger’s tax return for the year of the transfer of the Relinquished Property. Relinquished Property – The property “sold” by the Exchanger. This is also sometimes referred to as the “exchange” property or the “downleg” property. Replacement Property – The property acquired by the Exchanger. This is sometimes referred to as the “acquisition” property or the “upleg” property. Like-Kind Property – This term refers to the nature or character of the property, not its grade or quality. Generally, real property is “Like-Kind” as to all other real property as long as the Exchanger’s intent is to hold the properties as an investment or for productive use in a trade or business. With regard to personal property, the definition of “Like-Kind” is much more restrictive. Exchanger – The property owner(s) seeking to defer capital gains tax by utilizing a DST/ IRC 1031 exchange. The Internal Revenue Code uses the term “Taxpayer.” Constructive Receipt – A term referring to the control of proceeds by an Exchanger even though funds may not be directly in their possession. Qualified Intermediary (Q.I.) – The entity that facilitates the exchange for the Exchanger. Although the Treasury Regulations use the term “Qualified Intermediary,” some companies use the term “facilitator” or “accommodator.” Boot – Fair Market Value of non-qualified (not “Like-Kind”) property received in an exchange. Examples may be – but are not limited to – cash, notes, seller financing, furniture, supplies, and reduction in debt obligations. Receipt of boot will not disqualify an exchange, but the boot will be taxed to the Exchanger to the extent of the recognized gain. For informational purposes only. Northland Securities does not provide tax or legal advice. Accredited Investors interested in a tax-deferred DST/IRC 1031 Exchange should seek advice from their qualified tax and legal advisors. Trusted Advisors will not be compensated by Northland Securities. This is neither an offer to sell nor a solicitation to buy any security. Such an offer may be made only by means of an official offering memorandum. Investors should read any offering memorandum and review any risks associated with any offering. This website is incomplete and does not include all material necessary for an investor to make a determination regarding whether to conduct a DST/1031 Exchange. DST/1031 Exchange opportunities offered through Northland Securities are available only to Accredited Investors. Investors must be qualified prior to any discussion of a current or contemplated offering.