GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Exchange


Synonyms:barter, change, deal, shift, swap, switch, trade, transfer
Filed Under: financial-banking, mortgages, real-estate, taxation
Tags: banking, mortgage, realty, taxes
 

Definition of exchange

exchange
1. To give something in return for something else (such as goods or services). Making exchanges for similar or like property is a popular tax-deferral strategy.

Related Terms and Acronyms:

  • assignor
  • bilateral contract   A legal agreement in which both parties promise to give each other something. A purchase agreement in which the buyer promises to give money and the seller promises to transfer property is a bilateral contract.
  • income tax   The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.
  • offer   To propose or give something.
  • recognized gain or loss   The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.
  • swap   An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
  • tax deferral   The postponement of taxes to a later year, usually by recognizing income or a gain at a later time. Remember, this only delays your tax liability; it doesn't eliminate it.
  • tax deferred annuity (TDA)   A type of annuity where taxes are deferred until the annuitant decides to withdraw money from the annuity.
      ➥  More commonly known as a Tax Sheltered Annuity (TSA).
  • trade equity   A swap of property, such as real estate or a car, as part of a down payment for other real estate.
  • transfer of title (TOT)   A document signed by the seller and purchaser transferring ownership, at which time the document is registered against the property.

More Related Terms and Acronyms

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