It depends. See the information below and then update for any questions you may have.
To be clear, you continue the depreciation as though there was no trade. Then with any extra cash that was paid for the replacement property (the property received in the exchange) you set up a new asset and begin depreciation in 2022 as residential rental property using 27.5 year recovery period (depreciation method).
If you buy up in your exchange (your New Property cost more than you sold your Old Property), the answer is easy – you treat the additional cash part as you would a new addition to an existing property. In other words, you treat the amount of the buy-up the same as you would the cost of a capital improvement.
You can rename the old property using the new property address, etc.
Keep your records because they are important until the last property is completely disposed of through sale. The first property will continue to be related to the new property in each trade now and in the future if applicable.
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