Glossary of Terms

Boot 2015-09-16 08:00:00

Boot

Although not specifically defined (or even mentioned) in IRC Section 1031, the term “boot” is commonly used and refers to the fair market value of cash, benefit or other non “like-kind” property received by the taxpayer in an exchange of a capital asset which is subject to capital gains tax.

For example, if an investor generated $500,000 of net proceeds from the sale of their relinquished property, but only reinvested $450,000, the $50,000 of retained proceeds would be considered boot and subject to capital gains and depreciation recapture taxes.

 


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