Full Definition
In 1031 exchange terminology, 'boot' is any non-like-kind property, cash, or debt relief received by the exchanger. Boot is taxable to the extent of realized gain. Common forms: cash boot (proceeds taken out of the exchange), mortgage boot (debt reduction on replacement property).
Related Terms
1031 Exchange (Like-Kind Exchange)
IRS-approved strategy allowing investors to defer capital gains taxes by reinvesting proceeds from sold investment property into like-kind property.
Qualified Intermediary (QI)
IRS-required neutral third party that holds 1031 exchange proceeds and facilitates the transaction.