Hello Community - I have a couple of questions about rental property taxes, which I hope you can help with:
1) Depreciation Recapture: what is included here besides depreciation i.e. will house improvements, car depreciation amortized refi costs be included, and is it all taxed as 25%?
2) Passive loss carryforwards: at house sale time, are those deducted at Marginal Earned Income Tax Rate? I am a bit confused as it will be a LT gain (i.e. 15% tax rate) when house is sold but at what rate the passive losses be deducted ("recognized")? Understood that all besides depreciation (as it will be taxed at 25% for depreciation recapture?) will be deducted at Margin Earned Income Tax Rate?
Simple examples will be very helpful as well. I think the 2 topics above are generally misunderstood a lot.
