When two qualified assets are exchanged and their fair market values are not equal, additional nonqualifying property referred to as "boot" can be used to equalize the transaction without disqualifying the nonrecognition transaction.

Question

Quizplus · Accepted Answer

This statement is true. Boot refers to additional nonqualifying property that is used to equalize the value of two qualified assets that are being exchanged. The use of boot in this manner does not disqualify the nonrecognition transaction.

When Two Qualified Assets Are Exchanged and Their Fair Market