Recapture of Excess Depreciation
If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. You also increase the ad-justed basis of your property by the same amount.
Excess depreciation is:
1.
The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus
2.
The depreciation that would have been allowable for those years if you had not used the property predomi-nantly for qualified business use in the year you placed it in service.To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period.
https://www.irs.gov/forms-pubs/about-publication-946
If the property is listed property (described in
chapter 5), do not figure the recapture amount under
the rules explained in this discussion when
the percentage of business use drops to 50% or less. Instead,
use the rules for recapturing excess depreciation in
chapter 5 under What Is the Business-Use Requirement.
see page 57
in the example in the 5th year 2019, acquired 2015, business use drops to 50% resulting in depreciation recapture
so in your case, since acquired in 2017, if business use drops to 50% or less in 2021, you'll have to recapture depreciation.
in the future, a better idea is to take as much bonus depreciation (168k) as possible. there is no depreciation recapture if use drops below 50% ad it's not limited to business income.
so the recomputed deprection assuming
