If a taxpayer exchanges like-kind property under § 1031 and assumes a liability associated with the property received, the taxpayer is considered to have given boot in the transaction.

Question

Quizplus · Accepted Answer

When a taxpayer exchanges like-kind property under § 1031 and assumes liability associated with the property received, it is considered as receiving boot in the transaction. Boot is any property received that is not like-kind to the property given up and can trigger a taxable gain.

If a Taxpayer Exchanges Like-Kind Property Under § 1031 and Assumes