An instrument used to quantify the value of non-like-kind property received in a deferred real estate exchange. This calculation determines the taxable portion of the transaction. For example, if an investor exchanges a property valued at $500,000 for a replacement property valued at $450,000 and receives $50,000 in cash, that $50,000 constitutes taxable “boot.”
The utility of this assessment lies in its ability to provide clarity on the tax implications associated with a real estate exchange. Accurate assessment of the cash or other non-like-kind property is critical for strategic tax planning and compliance. Before the widespread adoption of digital tools, these computations were performed manually, increasing the risk of error.