Formulas used

  • Adjusted Basis = Purchase Price + Improvements
  • Realized Gain = Sale Price − Selling Costs − Adjusted Basis
  • Net Proceeds = Sale Price − Selling Costs − Mortgage Payoff
  • Taxable Boot (simplified) = max(0, Cash received)
  • Deferred Gain = Realized Gain − Taxable Boot
  • Estimated Tax Deferred = Deferred Gain × Tax Rate

Timing rules (overview)

  • Identify replacement property within 45 days of sale.
  • Complete acquisition within 180 days of sale.
  • Use a Qualified Intermediary; avoid receipt of proceeds.

FAQ

What is “boot”?

Cash or non-like-kind property received in the exchange. Boot is taxable up to the amount of realized gain.

Does debt relief create boot?

Debt relief can create taxable boot if not offset with new debt or cash added on the replacement property.

Tool developed by Ugo Candido. Finance content reviewed by the CalcDomain Editorial Board.
Last accuracy review: