BOOT

Money or other property that is not like-kind, which is given to make up any difference in value or equity between exchanged properties. Boot may be in the form of cash; notes; gems; or the market value of an asset such as a mortgage, land contract, personal property, goodwill, or a service or a patent offered in an exchange. The taxable gain in a like-kind exchange is recognized immediately to the extent of boot, whereas other gain from the exchange may be deferred until subsequent transfer.

Where liabilities (mortgages, deeds of trust) are assumed by both parties to an exchange of property, the amounts of the liabilities are netted to determine a net boot. An excess amount of liability assumed by one party to the exchange is boot to the other party. This is true whether the party to whom the property is transferred assumes the liability or merely takes the property subject to the liability.