Boot Rule
In a 1031 exchange, any cash taken out of the transaction or any reduction in debt assumed creates boot, which is taxable at capital-gains rates in the year of the exchange. Boot does not invalidate the rest of the exchange -- the non-boot portion still defers -- but the boot portion itself becomes immediately taxable. Common boot situations include taking cash out for closing costs or personal use, trading down to a less-expensive replacement property, and reducing the debt assumed on the replacement below the debt on the surrendered property.
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Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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