Taking cash out? Understand the boot.
Anything you receive that is not like-kind property — cash, debt relief, personal property — is boot, and it is taxable to the extent of your gain.
Boot and partial exchanges
Cash boot is the obvious one
Proceeds you pull out of the exchange rather than reinvesting are taxed. The rest of the deferral survives.
Debt relief counts too
Trading into a property with a smaller mortgage can create boot even when no cash changes hands, unless you offset it.
Partial exchanges are legitimate
You do not have to defer everything. You do have to know what the taxable portion will be before you close, not after.
Three steps, and we carry most of them
Call before you close
We confirm an exchange fits, map the deadlines against your timeline, and put the exchange agreement in place before the sale closes.
We hold the proceeds
Funds go from the closing table to us, never to you. That is what keeps the deferral intact.
You buy, we close it out
You identify and negotiate the replacement property. We handle the documentation, the funding and the reporting trail.
1031 Specialists
A partial exchange is a perfectly good outcome when an investor needs liquidity. What causes trouble is discovering the boot at tax time. Running the numbers early turns a surprise into a decision.
We are a qualified intermediary for IRC Section 1031 tax-deferred exchanges, facilitating exchanges for real estate investors in all fifty states. We handle the exchange agreement, the identification and closing deadlines, and the custody of exchange funds. Every exchange includes unlimited tax optimization consulting, audit protection and an attorney guarantee, on a simple flat fee you pay at close.
Boot and partial exchanges, answered
What exactly counts as boot?
Anything you receive that is not like-kind property — cash taken out, debt relief not offset by new debt or cash, and non-qualifying property.
Can I get boot without taking any cash?
Yes. Trading into a property with a smaller mortgage can create debt relief boot even when no money changes hands.
Does boot ruin the whole exchange?
No. It is taxable to the extent of your gain, and the rest of the deferral survives. A partial exchange is a legitimate outcome.
Talk to someone before the clock starts
Reach me directly, or call the main line and ask for anyone on the exchange team.
Main line
(631) 438-1031General email
info@1031specialists.comMailing address
30262 Crown Valley Pkwy, Suite B 464Laguna Niguel, CA 92677
The information on this page is general in nature and is not tax or legal advice. 1031 Specialists is a qualified intermediary, not a law firm, accounting firm or investment adviser. Consult your own tax and legal advisors about your circumstances before entering into an exchange.