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Generally, the taxpayer is not allowed to offset boot received with boot paid. However, when the taxpayer receives boot in the form of liabilities assumed by the other party, the taxpayer is allowed to net any boot paid against the boot received.

Answer :

However, when the taxpayer gives and receives boot in the form of Liabilities, the taxpayer is allowed to net the boot received with the boot paid

Boot is anything received by the taxpayer in a trade that is not regarded as being of "like kind." Cash, non-real estate property, or net debt reduction are some examples of this. Any boot received by the taxpayer is considered taxable gain and will result in a taxable event. Taxpayers can obtain "Boot" in a variety of ways, even unintentionally. If taxable income is to be avoided, it is crucial for a taxpayer to understand what can result in boot.

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