Help Interpreting 1031 Rule Changes

[Kon Zel]

Just saw an article on Bloomberg alluding to changes with 1031 exchanges.  The gist I'm getting is that the cost basis for the new property will be stepped down to adjust for depreciation on the property that's being exchanged out.  ie: $1mm property that was depreciated down to $500k exchanged into $2mm property.  The basis for the new property will be $500k.  

Any attorneys/CPAs out there that care to comment?  

This is the publication from the IRS (a bit dense for my taste): https://www.irs.gov/pub/irs-drop/reg-107892-18.pdf

[Paul Caputo]

@Kon Zel Only change to 1031's is it's only for real property now and personal property is excluded. 

If a $1mm property is depreciated halfway down to $500k and then exchanged for a $2mm property the basis in the new property should be $1.5mm for the $500k carryover basis and the $1mm excess over the original property. 

Am I on base and anything to add @Dave Foster?