Essentially you are correct, however in a 1031 exchange the depreciation continues on like there was no change in property. You still want and should have a full year depreciation on the property given up because that asset now becomes the property you received in the exchange. There is no change that you need to make.
As far as the Illinois (IL) return and assuming you are not a resident of IL here are the filing requirement rules. A loss on the exchange would not produce any taxable income and since you no longer own property in IL then it appears you are not required to file in the future.
A nonresident of IL, you must file Form IL-1040 and Schedule NR if
- you earned enough taxable income from Illinois sources to have a tax liability ( i.e., your Illinois base income from Schedule NR, Step 5, Line 46, is greater than your Illinois exemption allowance on Schedule NR, Step 5, Line 50), or
- you want a refund of any Illinois Income Tax withheld in error. You must attach a letter of explanation from your employer.
@te2021
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