DIY Products

DIY Products

Whether you’re an experienced do-it-yourselfer or doing your own taxes for the first time, this is your place to learn and share. Here you’ll find information and resources for using H&R Block’s online and software DIY solutions. You’ll also find links to more information to assist you on your DIY journey.

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Trusted Pioneer
Posts: 5
Registered: ‎08-10-2014

1031 exchange is a commission rebate at closing "boot"?

In my 1031 exchange for rental real estate There are two items on the positive side of the closing statement.  One is a tax refund- that pays me for my share of taxes already paid so that isn't boot.  But the other item is a rebate of Real Estate agent's commission which does reduce what I have to pay out to close on the property.  In other words, because of the rebate it takes that much less funds from the Exchange escrow account to close on the replacement property.  Though it is actually a discount on commission (which is sometimes split between buyer and seller) is it considered "boot", a cash payment, and so a "gain"?

 

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Associate (Pioneer)
Posts: 4
Registered: ‎01-20-2015

Re: 1031 exchange is a commission rebate at closing "boot"?

A rebate of a realtor's commission is considered to be a reduction of purchase price (and therefore, basis), and is not considered boot in the exchange.