Certified Exchange Specialist (CES)

Question 1

In a 1031 exchange, the term 'boot' refers to:

Additional like-kind real property received beyond the relinquished property Non-like-kind property, cash, or net debt relief received in the exchange The qualified intermediary's fee for facilitating the exchange Excess equity carried forward into the replacement property

Correct Answer:

Non-like-kind property, cash, or net debt relief received in the exchange

Question 2

A taxpayer relinquishes a property with a $500,000 mortgage and acquires replacement property encumbered by only a $400,000 mortgage. The $100,000 difference is best described as:

Cash boot received by the taxpayer Mortgage boot (net debt relief) treated as boot A non-taxable reduction in exchange value An exchange expense that offsets realized gain

Correct Answer:

Mortgage boot (net debt relief) treated as boot

Question 3

The amount of gain recognized in a partially tax-deferred 1031 exchange equals:

The total realized gain on the relinquished property The lesser of the boot received or the total realized gain The greater of the boot received or the total realized gain Zero, because all gain is always deferred

Correct Answer:

The lesser of the boot received or the total realized gain

Question 4

Which of the following is the clearest example of 'cash boot' in a 1031 exchange?

Assuming a larger mortgage on the replacement property Receiving non-like-kind personal property at closing Receiving cash proceeds that are disbursed to the taxpayer rather than reinvested Paying qualified intermediary fees from exchange proceeds

Correct Answer:

Receiving cash proceeds that are disbursed to the taxpayer rather than reinvested

Question 5

Which of the following costs are treated as exchange expenses that reduce boot and taxable gain?

Mortgage principal payments made before closing Selling commissions and transactional closing costs paid at settlement Depreciation previously taken on the relinquished property Tenant security deposits held in escrow

Correct Answer:

Selling commissions and transactional closing costs paid at settlement

Exam overview

About this Exam

Prepare with the Certified Exchange Specialist (CES) practice quiz. This question bank includes 86 questions covering exchange, property, taxpayer, boot, and replacement. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Certified Exchange Specialist (CES)

This practice set contains 86 questions from the matching question bank and focuses on exchange, property, taxpayer, boot, and replacement. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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About this Exam

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Certified Exchange Specialist (CES)

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