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1031 Boot Tax Calculator
In a 1031 like-kind exchange, 'boot' triggers immediate gain recognition. Cash boot = cash received in the exchange. Debt relief boot = the amount your relinquished debt exceeds your replacement debt. Boot is recognized as gain up to the deferred gain limit. This calculator computes total boot, recognized gain, and resulting tax — letting investors structure the trade to keep boot at zero.
Boot
Total boot
$50,000
Recognized gain
$50,000
Tax owed (~20%)
$10,000
Cash boot
$10,000
Debt relief boot
$40,000
How the math works
In a 1031 exchange, boot triggers immediate gain recognition. Cash boot = cash received. Debt relief boot = relinquished debt minus replacement debt (if relinquished was higher). Total boot is recognized as gain up to the deferred gain limit.
To fully defer: replacement value ≥ relinquished value AND replacement debt ≥ relinquished debt AND no cash received. Trade up in everything to keep all boot at zero.
How to Use
- Enter relinquished property value and debt paid off.
- Enter replacement property value and debt assumed.
- Enter cash received in the exchange (most common boot source).
- Enter total deferred gain (cap on recognition).
- Read total boot, recognized gain, and tax owed.
Frequently Asked Questions
How to keep boot at zero?
Trade up in everything: replacement value ≥ relinquished, replacement debt ≥ relinquished debt, no cash received. The 'three-property rule' helps identify multiple replacements.
Tax rate on boot?
Long-term capital gain rate (15-20% federal) plus depreciation recapture at 25% on portion attributable to depreciation. Calculator uses 20% as approximation.
Reverse 1031 boot?
Same boot rules apply — but in reverse exchange you can only have boot if cash flows back to you, which is rare in QI structures.
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1031 Exchange Calculator
Estimate deferred capital gains, depreciation recapture, boot, and the minimum reinvestment to fully defer tax on a like-kind exchange.