In a like-kind exchange, what does "boot" refer to?

In a like-kind exchange, "boot" specifically refers to cash or other property that is received by the taxpayer in addition to the like-kind property being exchanged. The concept is crucial because while the primary property may be exchanged tax-deferred under Internal Revenue Code Section 1031, any boot received is considered taxable. This means that if a taxpayer exchanges real estate for another piece of real estate but also receives cash or non-like-kind property as part of the transaction, the value of that cash or property must be reported as taxable income.

This understanding helps clarify tax implications during a like-kind exchange, highlighting the distinctions between property that qualifies for tax deferral and property that does not. In contrast, the other choices do not accurately represent the definition or treatment of boot in this context.