Managing Boot in Phoenix Exchanges
Understand how cash, debt relief, and personal property create boot for Phoenix investors and learn mitigation strategies.
Boot is the taxable portion of a 1031 exchange. Phoenix investors often encounter boot through debt relief, earnest money handling, or personal property transfers.
Debt Replacement Strategies
Ensure replacement financing matches or exceeds the relinquished loan balance. Consider supplemental debt, seller carrybacks, or DST allocations to close any gap.
Handling Personal Property
Equipment, furniture, or goodwill may generate taxable boot. Allocate values carefully and consult your CPA before closing.
Early modeling keeps Phoenix investors from discovering unexpected boot at closing.
Erin Delgado
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