1031 exchange cash boot - reduce taxable amount by deducting improvements made to relinquished property?

[Carter22]

Hello! 

I flipped House A and sold it for a profit. Used the proceeds to purchase House B via a partial 1031 exchange, was left with a cash “boot”. I understand this boot is taxed as capital gains, will I be able to deduct the price of purchasing and improving House A the same way I would have had I simply sold it outright and paid capital gains on all the profit? Or will I pay capital gains tax on the entire amount of the boot?

If I do have to pay tax on the entire boot amount, will I be able to make the House A deductions when I eventually sell House B? 

[M-MTax]

Have to pay tax on all of the boot. Add improvements cost to basis of replacement property.

[Mike9241]

also, the cash boot is taxed as ordinary income to the extent of depreciation taken on the relinquished property. it will show on line 21 of the 8824