If I exchange a property ($1,000,000 improvements/$600,000 land) with a total of 150,000 of accumulated depreciation deductions for a new property ($200,000 improvements/$3,000,000 land) will I have to pay depreciation recapture? I can defer capital gains as I am stepping up in total ($1.6M to $3.2M) but it is difficult to understand whether the depreciation recapture can also be deferred since I am going down from $36K annual depreciation to $7.2K annually. I want to elect out of the 2 step method for simplicity. Reg 1.168(i)-6(i)
