That makes sense to use the new basis (as a result of the deferred gain) as the cost of the new property so you don't have to go back and find it someday if/when you sell AS long as this doesn't mess up the depreciation schedules which would have to be based on the actual price you paid for the property. No-one mentioned this, but in case you are selling one property for example and purchasing say 3, I am lumping the 3 together as one for the form 8824, and splitting up the new basis by percentage to the new properties. I'll try this approach and if it doesn't work I'll update this thread.
