1031.Exchange INTELLIGENCE NETWORK
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TAX & BASIS

Mortgage boot

Also called: debt relief · mortgage relief · net debt relief

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PLAIN-ENGLISH DEFINITION

Industry shorthand for potential taxable consequences associated with net debt relief in an exchange.

What it means in practice.

Debt assumed, debt relieved and cash contributed can affect the exchange calculation. “Mortgage boot” is a planning shorthand rather than the wording used in the statute.

Why it matters.

Debt is part of the tax and financing model; investors should not focus only on sale price and purchase price.

Additional notes.

Debt assumed, debt relieved and cash contributed can affect the exchange calculation. “Mortgage boot” is a planning shorthand rather than the wording used in the statute.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/publications/p544irs.gov ↗irs.gov/publications/p551
CONNECTED LANGUAGE

Related definitions.

Tax & BasisBootCommon exchange-industry shorthand for money or non-like-kind property received in an exchange that can trigger recognized gain.Tax & BasisBasisA tax measure of investment in property used in calculating gain, loss, depreciation and other tax items.Tax & BasisRecognized gainThe portion of gain included currently for tax purposes.
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