我记得之前问过ＣＰＡ， 这个非常误导地产投资者
as a rental home owner, will unused deprecation for tax filing be counted in recapture when you sell the rental property?
No, unused depreciation for tax filing will not be counted in recapture when you sell your rental property. Depreciation recapture only applies to the depreciation that you actually claimed and deducted on your tax returns.
Here's a breakdown:
- Depreciation recapture: When you sell a rental property for more than your adjusted cost basis (original cost minus depreciation deductions), you may have to pay taxes on a portion of the gain. This portion, called depreciation recapture, is taxed at ordinary income tax rates, which are typically higher than capital gains rates.
- Unused depreciation: This refers to the portion of allowable depreciation that you chose not to deduct on your tax returns in a given year. You might choose this for various reasons, such as having enough deductions already or wanting to minimize your taxable income.
Since unused depreciation was never deducted, it doesn't affect your adjusted cost basis and therefore doesn't contribute to depreciation recapture when you sell the property.
Here are some additional points to consider:
- Even if you didn't claim all the allowable depreciation, you're still required to recapture up to the amount of depreciation you would have taken if you had used the straight-line method over the property's recovery period (27.5 years for residential rental properties).
- Depreciation recapture applies to both used and unused depreciation to the extent of the lesser of the recapture amount calculated above or the gain on the sale of the property.
