Definition
Computing
Boot, short for bootstrap, is the process of starting a computer from a completely powered-down state to an operational state where it can execute complex programs. The term derives from the phrase “pull oneself up by one’s bootstraps,” indicative of the computer initiating its startup process autonomously. The boot process can be categorized into two types:
- Cold Boot: Also known as a dead start, this involves powering on a computer that is completely shut down. During a cold boot, the system starts from scratch, initializing hardware and loading the operating system into memory.
- Warm Boot: Also known as a restart, this involves rebooting the system without shutting it down completely. Some programs may already be in memory, making the boot process faster than a cold boot.
Taxation
In the context of tax, boot refers to additional property or money included in a like-kind exchange (often under Section 1031 of the Internal Revenue Code) to balance the values of properties being exchanged. Unlike-kind property, such as cash or other non-qualifying property, added to balance the values, is known as boot. Receiving boot in an exchange can trigger recognition of gain for tax purposes since the boot is treated as taxable income.
Examples
Computing
- Cold Boot: When you press the power button on your computer in the morning, and it loads the operating system.
- Warm Boot: When you select “Restart” from your operating system menu, causing the system to reboot without shutting down completely.
Taxation
- Real Estate Exchange: If you trade a rental property worth $500,000 for another rental property worth $450,000 and include $50,000 in cash to balance the transaction, the $50,000 cash is considered boot.
Frequently Asked Questions (FAQs)
Computing
Q1: What is the difference between BIOS and UEFI in the boot process? A1: BIOS (Basic Input/Output System) and UEFI (Unified Extensible Firmware Interface) are two types of firmware interfaces for computers to start the operating system. UEFI is the modern solution with more features and a graphical interface, while BIOS is older and more limited.
Q2: What are the steps involved in the boot process? A2: Generally, the boot process involves the following steps:
- Powering on the computer.
- The power-on self-test (POST) is conducted to check hardware functionality.
- The BIOS or UEFI locates the boot loader.
- The boot loader loads the operating system (OS).
- The OS initializes the system and user applications.
Taxation
Q1: Is all boot taxable in a like-kind exchange? A1: Yes, the value of the boot received in a like-kind exchange is generally taxable if it results in a realized gain.
Q2: Can boot be avoided in a 1031 exchange? A2: Boot can be minimized or avoided by precisely matching the values of exchanged properties and ensuring loans are either adequately swapped or restructured.
Related Terms
- BIOS (Basic Input/Output System): Firmware used to perform hardware initialization during the boot process.
- UEFI (Unified Extensible Firmware Interface): A modern version of BIOS with advanced features and a graphical interface.
- Section 1031 Exchange: A provision in the Internal Revenue Code that allows property owners to defer capital gains taxes on the exchange of like-kind properties.
Online References
Suggested Books for Further Studies
- Computer Organization and Design: The Hardware/Software Interface by David A. Patterson and John L. Hennessy
- Computer Science Illuminated by Nell Dale and John Lewis
- Federal Income Taxation of Individuals: With Diagrams for Easy Understanding by John Kwon
Fundamentals of Boot: Computers and Taxation Basics Quiz
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