Legal Definitions - boot

Definition: Boot refers to something that is given in addition to. In the context of like-kind property under Internal Revenue Code Section 1031, it refers to cash or other property which does not qualify for the exchange and is taxed.

For example, if a taxpayer sells a relinquished property for $150,000 and buys a replacement property for $120,000, the difference of $30,000 is referred to as boot and is taxable. This means that the taxpayer will have to pay taxes on the $30,000 difference because it is not considered like-kind property.

Another example of boot is when a person trades in their old car for a new one. If the value of the old car is $5,000 and the new car is $10,000, the person may have to pay taxes on the $5,000 difference because it is considered boot.

These examples illustrate how boot is something that is given in addition to and is not considered like-kind property. This means that it is taxable and the person will have to pay taxes on the difference in value.