Calculators · Boot
Boot Calculator: Cash and Mortgage Boot on a Partial Exchange
Trade down, take cash at closing or replace less debt, and see the cash boot, the mortgage boot after netting, the recognized gain and the federal tax on it by layer.
What this calculator does
Boot is anything you receive in an exchange that is not like-kind real property: cash left with the intermediary, cash taken at closing, and debt relief that is not replaced by new debt or new cash. Boot is taxable up to your realized gain, and it is taxed in a fixed order: the depreciation layer first at up to 25%, then the capital gain rates.
Enter both sides of the exchange and the calculator applies the netting rules in Reg. section 1.1031(d)-2, caps the recognized gain at the realized gain, and taxes it by layer on top of your other income. For the whole picture of a fully taxable sale see the 1031 exchange calculator.
Boot and the tax on it
How the numbers are calculated
Cash boot = amount realized minus replacement price minus exchange expenses, if positive, plus any cash taken at closing. Mortgage boot = debt relieved minus debt assumed minus cash added, if positive. Net boot is the sum. Recognized gain is the smaller of net boot and realized gain (amount realized less adjusted basis).
Recognized gain is taxed first as unrecaptured section 1250 gain up to the depreciation taken, at ordinary rates capped at 25%, stacked on other taxable income (other income less the 2026 standard deduction), then at the 0/15/20% capital gain rates. The 3.8% net investment income tax is applied to the recognized gain above the fixed thresholds. State tax is not included.
Questions about this calculator
Can cash I add offset mortgage boot?
Yes. Cash you bring to the replacement closing offsets debt relief. Debt you take on never offsets cash you receive. See the netting rules.
Which layer does boot hit first?
Recapture first. Boot is taxed as unrecaptured section 1250 gain up to the depreciation you took, then as capital gain. See boot taxed as recapture or capital gain first.
Do closing costs on the replacement reduce boot?
Exchange expenses such as commissions and title fees reduce boot. Prorations, deposits and loan costs do not. See closing costs paid from exchange funds.
Is boot capped at my gain?
Yes. Recognized gain is the smaller of the net boot and the realized gain under section 1031(b).
Sources
Figures checked on September 30, 2026. Rates and thresholds change each year; this page is general information, not tax or legal advice.
- Internal Revenue Code section 1031(b) and (d)
- Treasury Regulation section 1.1031(d)-2, treatment of liabilities (netting examples)
- Treasury Regulation section 1.1031(k)-1(g)(7), transactional items
- IRS, Instructions for Form 8824 (lines 15 to 20)
- Rev. Proc. 2025-32, 2026 brackets and capital gain breakpoints
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