The 1031 should be solely in 2022, when the property is sold. The sale property was still in service all of 2021 and did not sell until 2022 when it's depreciation would end.
The replacement property was not in service until it was swapped with the relinquished property, so it would not be depreciated until 2022.
Who owned the replacement property in 2021?
Thanks very much for your response.
I think that, technically, the replacement property was "parked" in tax year 2021. ie title held by LLC formed by the Exchange company. The exchange company did create agreement allowing client to manage property while parked (which included all time the parked property was held by the LLC in year 2021)
Someone has to pay tax on the 2021 rental income. I don't think the exchange company coughed it up. Did the exchange company issue a 1099 to your client?
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