If investors assume greater debt with the replacement property than they had with the relinquished property, the additional debt assumed may be added to the tax basis of the investment. This larger tax basis can provide increased tax shelter due to a larger deduction for depreciation expenses. (Please note that depreciation is an accounting concept and is allowed even if the property is appreciating in value.)
A significant number of investors have owned their relinquished property for some time and have little or no remaining debt. In this case, it is worth considering increasing basis through investment in a conservatively leveraged property.