Not all property transferred or received in an exchange may be of like kind. Other property or money can be transferred in an exchange, without invalidating the entire exchange. Such non like-kind property is called "boot". In general, boot is only taxable to the extent of the realized gain. Transactions involving boot must be very carefully structured so as not to invalidate the qualifying portion of the trade. The receipt of money or non like-kind property will cause the realized gain, if any, to be recognized to the extent of the money and the fair market value of the unlike property received. In other words, you have to pay taxes on any money or other non like-kind property you receive in an exchange. Properly configured exchanges are structured so as to eliminate or minimize boot.