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What is “boot” in a nonmonetary exchange?

When two parties are exchanges similar assets, its going to be very rare that they have the exact same fair market value. So what is the solution? Well, one party would throw in cash or another asset to make the trade even, and that is known as “boot”!

When cash or other property is added, then its important to remember to factor the boot into the fair valuation assessment. The visual below is a reminder of how to treat cash/boot if you have to pay it or you receive it.

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