Basically, *you* can't do a 1031 exchange. That has to be pre-arranged with a 3rd party (preferably one that "has a clue" and knows what they're doing) prior to the sale/exchange. As far as the classificiation of e property goes, it will (and must) remain classified as a rental. If you convert it to personal use before the 1031 exchange and then exchange it for other rental property, you'll find yourself in a never ending nightmare with the IRS from which you'll never awaken.
Now when it comes to 1031 exchanges, I don't answer posts with questions about that, because I know just enough about 1031 exchanges to be down right dangerous. Basically, the only "fact" I know about such a transaction is that it must be completed by a licensed 3rd party that has no personal interest in the properties being exchanged.
For a 1031 exchange, how the depreciation is handled can differ, depending on a number of things that I don't know enough about.
