In the context of a real estate exchange—specifically a 1031 exchange under U.S. tax law—boot refers to any non-like-kind property or cash received by a taxpayer during the exchange process. The primary goal of a 1031 exchange is to defer capital gains taxes by reinvesting all proceeds from the sale of an investment or business property into a like-kind replacement property. However, when a party receives something other than qualifying like-kind real estate (such as cash, debt relief, or personal property), that portion is referred to as boot and is subject to immediate taxation.
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