A 1031 exchange defers depreciation recapture - it does not eliminate it. The recaptured depreciation carries forward into the replacement property's basis. If you eventually sell without another exchange, you face cumulative recapture from every prior property in the chain. The only ways to permanently eliminate recapture are dying (stepped-up basis) or donating the property to a qualified charity. Plan your exit strategy accordingly.
From the seller playbook: Depreciation Recapture Planning
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
More questions on this topic
List for free, or go full service for 1%.
Use the playbook yourself, or let us run pricing, marketing and negotiation.