Cash you take out, and debt you do not replace

Both are called boot, and receiving either can make part of your gain taxable now. This tool adds the two up in simplified form. It does not calculate recognized gain or tax.

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Enter what you expect at closing

Rough numbers are fine. This is a simplified estimate, not the full Form 8824 recognized-gain calculation.

Cash you take out of the dealSale money that comes to you instead of going into the replacement property.Loan paid off on the property you soldThe loan balance cleared when you sold. Tax rules call that the relinquished property.Loan you take on the new propertyThe loan you take on the replacement property you buy.Cash you bring to the purchaseMoney from outside the sale that you put into the purchase. It counts against debt relief, so it can reduce your boot. It does not offset cash you took out.Your estimated gain on the saleSale price minus your adjusted tax basis: what you paid, plus improvements, minus depreciation. Your CPA has the exact figure.

Estimated boot (simplified)

Boot is value you receive that is not like-kind real estate: cash, plus debt you walk away from and do not replace. The figure above is the smaller of that total and the gain you entered. It is not recognized gain and it is not tax.

Cash you take out$0

Debt you did not replace$0

Cash plus debt not replaced$0

The figure above leaves out other Form 8824 inputs and adjustments: exchange expenses and non-cash property received. It is not a recognized-gain or tax calculation.

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Frequently asked questions

What is boot in a 1031 exchange?

Boot is value you receive that is not like-kind real estate. Cash is the obvious case; so is debt you walk away from and do not replace. Receiving either can make part of your gain taxable now.

Does receiving boot invalidate the exchange?

No. Receiving cash or other non-like-kind property does not by itself disqualify the exchange. It generally makes part of the gain taxable. How much depends on the full Form 8824 calculation and on facts this tool does not model.