what is boot 1031 exchange
What is a boot 1031 exchange ? This is a question that many people ask when they are looking to invest in real estate . A boot 1031 exchange , also known as a reverse 1031 exchange , is a type of transaction that allows investors to swap properties without having to pay capital gains taxes. This can be a great way for investors to move their investments around without having to incur any penalties. When an investor engages in a boot 1031 exchange , they are exchanging one property for another without having to pay any capital gains taxes. This is accomplished by using the proceeds of the sale of the first property as “boot,” or money, towards the purchase of a second property. The difference between the fair market value of both properties must be exchanged in cash or other assets in order to complete the transaction and avoid capital gains tax liability. The advantages of a boot 1031 exchange include avoiding hefty taxes on profits from real estate investments, deferring tax pa...