How are they able to do this without getting around Boot Income that they would have to pay in the event that it was not a like kind exchange. Additionally is it acceptable to undervalue a property to improve the Adjusted Cost Basis. Seems to me that this is similar to me selling a used car for a dollar and accepting a envelope full of cash for my administrative fee. In the end it would appear to be an illegal transaction as it misrepresents actual value for the purposes of avoiding taxes.