I am not sure I understand what you specific question is; but the general concept in like-kind exchanges is that gain is deferred, but not forgiven.
One must calculate and keep track of his basis in the new property he acquired in the exchange. In general, the basis of property acquired in a Section 1031 exchange is the basis of the property you gave up with some adjustments.
This transfer of basis from the relinquished to the replacement property preserves the deferred gain for later recognition. When the replacement property is ultimately sold (i.e. not as part of another exchange), then the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.
Does this answer your question?
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