Definition
Boot is non-like-kind property or cash received in a 1031 exchange, which is taxable. Replacement property must be equal or greater in value to avoid taxes.
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If replacement property costs less than the original property sale price, the difference is taxable boot. Similarly, if cash is received, it's taxable boot. To avoid taxes, replacement property must be equal or greater in value. Boot can include mortgage debt relief as well.
Pro Tip
Ensure replacement property is equal or greater in value than relinquished property.
Example
Selling property for $400,000 with $200,000 mortgage, exchanging for $350,000 property with no mortgage results in $50,000 boot