PerpetualCheerfulBeaver
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Simple English definitions for legal terms
boot
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A quick definition of boot:
Boot: Something extra that is given in addition to something else. In the context of property exchange, boot refers to money or property that is added to make up for the difference in value between two properties being traded. For example, if someone sells a property for more than they buy a replacement property, the difference is called boot and may be subject to taxes.
A more thorough explanation:
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.