Concepts
Boot, in plain English
Boot is value you receive in an exchange that isn't like-kind replacement property. It commonly causes gain to be recognized even when the rest of the exchange is otherwise deferred.
Last reviewed against primary IRS sources: September 2026.
Cash boot
If net equity from the sale is not fully reinvested, the cash left over is generally treated as boot. This is the most common and most avoidable form.
Mortgage boot
If the debt paid off on the relinquished property exceeds the debt taken on (or cash added) for the replacement property, the net relief is generally treated as boot.
Investors often address this by adding cash to the purchase or increasing financing on the replacement property.
Planning around it
The general planning targets are simple to state and easy to miss in practice.
- Acquire replacement property of equal or greater value.
- Reinvest all net equity from the sale.
- Replace debt with debt or with additional cash.
- Watch closing-cost treatment — some items can create unexpected boot.
Frequently asked
- Does boot disqualify the whole exchange?
- Not usually. Boot typically causes gain recognition up to the amount of boot received, rather than invalidating the entire exchange, but treatment depends on the facts.
- Can the calculator tell me my tax?
- No. The FortyFive calculator estimates targets and shortfalls only. It does not compute tax and is not tax advice.
Put this to work
Check a replacement property for free, then save up to three candidates in your workspace.
This page is general education about United States federal IRC §1031 concepts. It is not tax or legal advice. FortyFive is not a Qualified Intermediary, broker, tax adviser or law firm. Confirm anything transaction-specific with a qualified tax professional.