Depreciation recapture is a significant factor in participating in a like-kind exchange. While capital-gains tax rates are currently at historical lows, tax rules require you to recapture the portion of the gain on the sale that relates to allowable depreciation over the period the asset was held. Additionally, you must recapture it at a higher tax rate (typically 25%).
For the purpose of discussion, the depreciation recapture rules assumes that:
(a) your regular marginal income tax bracket is greater than 15%, and
(b) the real estate sold is the only business asset sold by you in the tax year of the sale