1031 Boot Calculator
“Boot” is value you receive in an exchange that isn't like-kind real estate — leftover cash or debt relief. This tool estimates your cash and mortgage boot and the tax on it.
How this is calculated
Cash boot is the sale equity you don't reinvest (equity from the sale minus equity put into the replacement). Mortgage boot is the reduction in debt (old debt minus new debt), reduced by any extra cash you add. Total boot is taxable up to the amount of your realized gain, at your applicable rate. To defer fully, buy equal or up in value and replace all debt so boot is zero.
Notes & assumptions
- Adding cash to the replacement property offsets mortgage boot but not cash boot.
- Boot is taxable only to the extent of your realized gain.
- This tool does not account for exchange expenses that may adjust boot; ask your qualified intermediary.
Frequently asked questions
What is boot in a 1031 exchange?
Boot is any non-like-kind value you receive — typically cash you keep (cash boot) or a reduction in debt (mortgage boot). Boot is taxable up to the amount of your gain.
How do I avoid boot?
Buy a replacement property worth at least the net sale price of what you sold, reinvest all of your equity, and replace the debt you paid off (or add equivalent cash).
Is mortgage boot really taxable?
Yes, unless offset. A reduction in your mortgage is treated as value received, but you can offset it by investing additional cash into the replacement property.
Gerald F. “Jerry” Baker, III — Founder & Managing Principal, Baker 1031 Investments · FINRA Series 22 / 63 · SIE. Read full bio →
This calculator is for educational estimation only and is not tax, legal, or investment advice. Results are approximate and depend on assumptions that may not fit your situation; confirm any figures with your own CPA and attorney before acting. Securities are offered through Aurora Securities, member FINRA/SIPC. Real estate investments involve risk, including possible loss of principal.