§1031 Exchange Terms / Glossary

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Net Worth Total assets minus total liabilities of an individual or company.

NNN Lease A lease that requires the tenant to pay for property taxes, insurance and maintenance in addition to the rent (also referred to as Net Net Net Lease or Triple Net Lease).

Qualified Intermediary (QI) The corporation or individual who acts as the accommodator in the exchange. A qualified intermediary is identified as follows:

• Not a related party to the Exchanger (e.g. agent, attorney, broker, etc.)
• Receives a fee
• Acquires the relinquished property from the Exchanger and
• Acquires the replacement property and transfers it to the Exchanger.

Real Estate Provider or Sponsor is a Real Estate company that focuses on acquisition of institutional-grade investment property for the purposes of offering Tenants In Common investment opportunities.

Relinquished Property refers to the property that is given up or sold in the §1031 exchange.

Replacement Property refers to the new property being acquired or the target property being brought by the Exchanger.

Replacement Property Specialist® is a professional investment consultant, experienced in identifying suitable replacement property for investors seeking to complete a §1031 exchange, as well as making other real estate investment recommendations. Also known as AMBAR Financial Group!

Risk The possibility of loss of capital on an investment.

Securities Licenses are required by securities law when investment advisors consult clients regarding TIC/CORE transactions and other investment interests in real estate. In addition to their real estate licenses, consultants, such as Replacement Property Specialists®, should hold both Series 7 and Series 63 securities licenses.

Tax Basis or Basis The tax basis in a property is equal to cost minus accumulated depreciation. When exchanging, the beginning basis is equal to the tax basis in the relinquished property, increased by any new cash (including any increase in non-recourse debt) that is paid in the acquisition of the replacement property. Tax basis is depleted through annual depreciation and increased by capital expenditure.

Taxpayer is the person conducting the §1031 exchange.

Tax Shelter A technique that allows an investment to be legally exempt from federal, state, and local taxes to varying degrees.

Tenancy In Common or TIC is a way of sharing ownership of property among up to 35 persons or entities in which each tenant holds an undivided interest in the entire property, either equally or in designated interests of differing sizes. TIC investors are on deed and considered separate owners of the real estate, sharing pro rata in the income, tax benefits, and appreciation of the property, with the properties employing professional asset and property management.

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AMBAR Financial Group does not offer legal or tax advice. AMBAR encourages clients and visitors to seek independent legal and tax advice from competent professionals to discuss their personal financial situations. Registered Representatives may only transact business in states where they are registered, or exempt from registration. Currently we have Representatives registered in: AL, AZ, CA, FL, MN, MO, PA, TX. If your resident state is not listed, please contact us at 408-379-6510. Under normal circumstances, securities licensing procedures for additional states may take 24-72 hours. We will not effect or attempt to effect securities transactions, or provide personalized investment advice to, or communicate directly with residents in a state in which a Representative is not registered.

Property photos shown here are being provided for educational purposes only, to illustrate the different property types available in the real estate market. These photos are not intended to represent any particular type of TIC offering nor are they intended to represent any current or future TIC offerings.