Depreciation and 1031

[Elizabeth Woolf]

Someone gave me some advice that sounded too good to be true so I want to verify. 

If I own a home for 27.5 years and have taken the depreciation expense every year, then I sell the house (for easy numbers let's just say at the buying price) and buy another one in a 1031, he said that I won't pay capital gains and can start depreciating the new house all over again for ANOTHER 27.5 years. Is this right or do you get 27.5 years total between the two houses when you do a 1031?

[Dave Foster]

spot on @Mark Creason.  You only get the tax break of depreciating a dollar once.  However @Elizabeth Woolf the power of the 1031 is that you can move, grow, and reposition your portfolio without having to recapture (repay) the depreciation you were granted.  This can be a significant savings over time and there are ways to eliminate that deferred tax permanently.  It is possible though to buy yourself more depreciation buy selling a property using a 1031 exchange and purchasing a larger property or properties.  The additional. Amount you purchase adds to your depreciable basis.  Not quite as good as you were told but certainly a very good tool.