1031 Exchange Boot Calculator
Boot is anything you receive in an exchange that is not like-kind property, and it is taxable even when the rest of the exchange defers perfectly. It comes in two forms that behave differently: cash boot is money that does not end up in the replacement property, and mortgage boot is debt relief. Taking on more debt does not offset cash boot — but bringing in more cash does offset mortgage boot.
Your result
You have boot
You have $140,000 of cash boot, $140,000 in total. Boot is the ceiling on what is taxable, not the tax: you recognise the lesser of the boot and your realised gain, so work the gain out before assuming this whole figure is taxed.
Total boot
$140,000
Cash boot
Exchange proceeds the purchase did not absorb, plus anything taken at the sale.
$140,000
Mortgage boot
Debt relief, after any outside cash you brought in.
$0
Taxable now
The lesser of your total boot and your realised gain.
Enter your realised gain
How the money moves
Exchange proceeds held by the intermediary
Sale price, less selling costs, less the loan paid off, less any cash you took.
$540,000
Equity the purchase needs
Purchase price less the new loan.
$400,000
Proceeds applied to the purchase
$400,000
Proceeds returned to you
$140,000
Outside cash still needed to close
$0
Debt relief before offset
$0
Cash offset applied against it
$0
How to remove it
- Buy $140,000 more replacement property — or add it to a second replacement — so the intermediary has nothing left to return to you.
The rule people get backwards
Putting more of your own cash in offsets debt relief, dollar for dollar. Taking on more debt does not offset cash boot — only buying more property does. And cash taken at the relinquished closing is boot even if you later put it into the replacement, because it never entered the exchange.
Want the detail?
Every step of the boot calculation written out, the remedies for your specific figures, and the rules on offsetting — a document your intermediary can work from.
Boot is usually fixable before closing and almost never afterwards. An exchange-experienced CPA or intermediary can restructure it while there is still time.
Your result above is complete and stays on the page whether or not you fill this in.
How much boot will I have in my 1031 exchange?
The taxable leftovers in an otherwise deferred exchange, split into both kinds.