What does boot mean on the CPA exam?
Boot. Anything received in an otherwise tax-free exchange that is not the qualifying property, typically cash or debt relief. Gain is recognized up to the boot received.
Defined against Sec. 1031(b).
Which CPA exam sections use boot?
Boot appears in the TCP section of the CPA exam.
Related terms
- at-risk amount: How much a taxpayer could actually lose in an activity: cash and property contributed, plus debt they are personally liable for.
- like-kind exchange: A swap of real property held for business or investment, where gain is deferred rather than recognized.
- cash basis: Recognizing revenue when cash is received and expense when cash is paid.
- carryover basis: Basis that follows the property from the previous owner instead of resetting to what was paid.
- hot assets: A partnership's unrealized receivables and inventory.
- qualified nonrecourse financing: Borrowing secured by real property from a commercial lender, where nobody is personally liable.