@thompsam , (a) there are really no section 1031 related changes that have been enacted recently. Note however that 1031 is only a mechanism for and reporting of exchanging one asset for another like-kind, it has nothing to do with recognition of income and expenses associated with the asset ( from a purist standpoint).
(b) once the exchange has been consummated, the reporting of income and expenses (schedule-E in your particular case ) must conform to the actual acts and circumstances i.e. in my purist view, the yearly return must recognize the existence of both the properties -- I say this because in actual fact the expenses and earnings for each property occurs ONLY during ownership of that property -- thus you should not claim expenses of the new property on the old/relinquished property , even though tax wise it may not make a difference but artifacts are not real and you are claiming that as true and it is not.
(c) my suggestion would be to declare the property B ( the new property ) as a new property with its own earnings ( zero in your case ) and expenses & depreciation etc. This is because even when you do not have a renter, it is still available for rent i.e. if somebody want to rent this in December ( very unlikely ) for a good amount , you would not refuse that, would you? The property is still rental property and not a second home/personal use property.
That is where I stand on this --- I do not believe any of the superusers would disagree with me on this.
