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leo
Level 2

i have a large home office carryover loss of excess depreciation, will i have to pay 'recapture depreciation' tax for these carryover loss when i sell my house?

i have a home office in my primary residence. The self-employment business has been showing a loss so not all home office depreciation can be deducted. and I am seeing a large number in "carryover of prior year excess casualty losses and depreciation" (form 8829 line 31). For the sake of easy discussion, let's say it's $10,000

 

My question is, when I sell this house in the future, will I have to pay 'recapture tax' for this $10,000 'carryover of excess depreciation'? will this $10,000 be treated as 'allowed/allowable depreciation', regardless i actually took it or not, i will have to pay tax for "recapture depreciation" for this $10,000? 

 

and if yes, how do i fix that? file multiple amendments for past years to remove home office? to change it to 'simplified deduction'? i moved into this house for less than 3 years, so should still be able to file amendments for all past years. 

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1 Reply

i have a large home office carryover loss of excess depreciation, will i have to pay 'recapture depreciation' tax for these carryover loss when i sell my house?

No.  If you were never able to take it, that amount won't affect the gain when you sell the house.

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