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Get your taxes done using TurboTax
Yes, depreciation recapture is the one thing I forgot to mention. You "WILL" pay taxes on the recaptured depreciation no matter what. Depreciation recapture is "not" included as a part of the "2 of last 5" rule. Recaptured depreciation is taxed depending on your AGI up to a maximum of 25%. So your tax on the recapture could be anywhere from 0% to the max of 25%.
Depending on your gain, that max threshold only helps if you're in the 32% bracket or higher.
‎November 15, 2022
5:35 PM