Build Out

Improvements made to a ‘shell’ space. Examples of ‘building out’ a space include erecting interior walls and doors and running electrical wiring.

Boot

When the value of the Replacement Property is less than the value of the Relinquished Property, the difference in value between the two is called “boot”. Any boot that an investor receives when conducting a 1031 exchange is subject to capital gains tax that cannot be deferred as part of their 1031 transaction.