Mortgage company payoff at closing considered boot

[Rachel L.]

Is the payoff to the mortgage company during closing for a 1031 exchange considered an allowed expense or is it considered boot?

[Wayne Brooks]

Not “considered boot” if you meet the 2 1031 basic requirements...

1-must reinvest all cash from the sale

2- must buy a property equal/greater than the sales price of the sold property (less actual sales/closing costs)

So no, you can’t buy a replacement property equal to just the cash you get.