I sold a rental property in 2021 that was converted from a main home in 2012. Until this year, I never claimed depreciation. Every year was a loss since tenant rent did not cover mortgage and other expenses. My available loss deducation that accumulated was calculated to be over $104,000. The house was purchased on 2005 for $367,663 and land value was $78,000. The home sold for $380,000, but commissions were $22,800 and there were many sales expenses. The amount that went to me and the mortagae pay off was $357,200, which is $10,463 less than what I paid for the home. And that doesn't account for the sale expenses lost.
Now comes depreciation. Under the Sale of Property / Depreciation, I indicated that the home was sold, gave the requested information and it calulated that I could have claimed $92,603 in prior years and $10,094 this year. I'm not being asked for a sales price here and I've read a lot of conflicting posts on that. The botton line is that when I follow any of the several suggestions regarding how to input the sales information, because of this depreciation recaputure, I go from a refund of nearly $14K to owing nearly $14K.
What's going on here? This property has costs me a ton of money and I did not make a profit on the sale. Tubo says I'm entitiled to $104K in losses now that the home is sold. What am I doing wrong here? Do I owe $14K or am I due $14K? I know about Form 3115 to claim the prior depreciations, but that's even more confusing that my current predicament. So before going there, is there anything in what I'm saying about that is a hint of something I might be able to easily correct?
