Enter your numbers. See what portion of the exchange is taxable as boot.
Educational estimate using common 2026 rates. Not tax advice.
Cash boot is the sale proceeds you keep instead of reinvesting. Mortgage boot is the net reduction in debt when your new loan is smaller than the one you paid off. Together they are the boot amount, taxable up to the amount of your gain.
Run the full exchange numbers, timeline, and capital gains side-by-side with our free tools.
In a complete exchange, you reinvest all proceeds and carry equal-or-greater debt. Boot is what you have left when the exchange falls short of perfect: cash you pocket, or a smaller loan on the new property than the one you paid off. Both count as value received, and both are taxable up to your gain. The exchange itself does not fail; that portion is just not deferred.
To see how boot affects the full exchange, including depreciation recapture and total tax due, use the 1031 exchange calculator.
Sale proceeds you keep rather than reinvesting. Any amount not deployed into the replacement is cash boot.
The reduction in debt when your new mortgage is smaller than the one retired at closing. The IRS counts the forgiven debt as value received.
Boot is taxable up to your realized gain. No gain means no tax on the boot, but most exchanges involve a gain.
Reinvest all proceeds and take on a new mortgage equal to or greater than what you paid off. Both conditions must be met.
No. It is an educational estimate. Consult a qualified intermediary and tax professional.