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What is boot, and how can I avoid it? 

Boot refers to any non-like-kind property received in a 1031 exchange, such as cash, debt relief or personal property. While receiving boot does not disqualify the exchange, it can create a taxable gain, resulting in a partially deferred exchange rather than a fully tax-deferred transaction.

How to avoid boot: 

• Trade equal or up in value: The replacement property must be equal to or greater in value than the relinquished property. 
• Fully reinvest net equity: All proceeds from the sale must be used to acquire the replacement property—any leftover cash becomes taxable boot. 
• Match or exceed existing debt: The loan amount on the replacement property must be equal to or greater than the debt on the relinquished property. If the loan amount on the replacement property is lower, you can add cash to offset the difference to avoid boot.