I used this: http://www.1031.us/PDF/Depreciationof1031.pdf
Elect-out of Using New Rules. The new regulation does permit the taxpayer to elect-out of the
rules and to treat the entire replacement property as a new asset. To make the election to not
use the new rules, see the instructions for IRS Form 4562, Depreciation and Amortization at
www.irs.gov. The election is made on IRS Form 4562 with your on-time tax return for the year
the replacement property is received. Also, the 2004 regulations do not address how the
depreciation rules work with exchanges of multiple replacement properties. The simplest
approach would be to elect out of using the new rules and depreciate each property using a
new depreciation schedule. The starting basis for the individual multiple replacement
properties is the ratio of its value to the total value of all the replacement properties multiplied
against the total new basis for all the replacement properties as reported on Form 8824.
