Boot Recognition Tax Calculator

Boot triggers tax even in 1031 exchange.

Sale price (relinquished)

Replacement price

Debt released

Debt assumed

Tax rate %

Tax owed on boot

$252,000

Value boot

$500,000

Mortgage boot

$400,000

How the math works

Value boot = sale − replacement. Mortgage boot = debt released − debt assumed. Tax = (value + mortgage) × rate.

$500k value boot + $400k mortgage boot = $900k total boot. × 28% = $252k tax. Offset by full deferral benefit.

How to Use

Enter sale price.
Enter replacement price.
Enter debt released.
Enter debt assumed.
Enter tax rate %.
Read boot and tax owed.

Frequently Asked Questions

What is boot?

Non-like-kind property or cash received in a 1031 exchange. Triggers tax recognition. Cash boot: direct. Mortgage boot: debt relief on relinquished > debt taken on replacement. Constructive receipt (e.g., touching funds) = full disqualification, not just boot.

Typical boot?

Trading down: replacement value < relinquished. Trading out of debt: less debt on replacement. Non-qualifying property (personal use, dealer inventory). Improvement exchange where improvements not complete. Keeping cash at close.

Minimize boot?

Buy equal or greater value. Take on equal or more debt. Reinvest all proceeds. Use improvement exchange carefully. Partial 1031 (some boot) vs full tax — math determines which is better. Always model before committing.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.