Let's pretend: TP sold an asset for the business or rental with an original basis of $100k and adjusted basis on sale of $60k. They sold the old one for $100k and bought a new one for $100k,

The deferred gain is $40k, and the new property has a basis of $60k, which is the only number being depreciated.

The new property, basis $60k, should be depreciated over 27.5 or 39 years straight line, which is not the same as the old property continuing depreciation.