Boot is cash or non-like-kind property received in a 1031 exchange, and it is taxable in the year of the exchange.
Boot is not a penalty, but it is the part of an exchange that gets taxed. It most often shows up as cash left over after closing, but it can also arise when the new mortgage is smaller than the old one and the shortfall is not made up with additional cash, which is called mortgage boot. Exchangers usually aim to buy replacement property of equal or greater value, with equal or greater debt, so that no boot is created. Any boot is taxable to the extent of gain, so plan with your tax advisor before closing.