No. A problem will not occur by listing one asset for depreciation, and this will not raise any flags. The difficulty comes for you if only one of them is sold at a time (assuming this is not one building with four units). If this occurs, then a breakdown of the cost will need to be adjusted and a sale will be a manual entry or another asset created while the first asset is changed.
Depreciation Rules for Section 1031 Exchange:
The following information is included for clarification.
The basic concept of a 1031 exchange is that the basis of your old property rolls over to your new property. In other words, if you sold your old property for $100,000, and bought your New Property for the same, your basis on the new property would be the same. It makes sense then that your depreciation schedule would be exactly the same, which it is. In other words, you continue your depreciation calculations as if you still own the old property (your acquisition date, cost, previous depreciation taken, and remaining undepreciated basis remain the same).
In a case where there are several properties in exchange for one property, and if you did want to separate them, the best way to divide the asset cost basis is by determining a percentage of cost basis for each property. Then setting them up exactly as the one asset is now (assumes there was one property and now four). To do this you can use the tax assessed value of each property and divide that by the total value of all properties to arrive at the percentage for each property. Then use that percentage against your old property cost basis (land should be accounted for separately using the same method).
If you pay additional money in the exchange or have improvements to the new property, then that alone becomes a new asset for depreciation and begins it's 27.5 year recovery on the date of the exchange. And if you decide to separate the properties, use the same method.
You can wait until you sell one or all of the properties, it's up to you.
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