Carl
Level 15

Business & farm

Many are of the mistaken belief that depreciation is a permanent deduction. It is not, except under specific circumstances. The bottom line is, if you did *not* sell the asset, click YES.

Otherwise, if you sold the rental property  at a gain then you must show a gain on all assets. The sale price for all assets needs to be "at least" $1 more than the original cost basis. Doesn't matter if it's $1 more or $10,000 more. A gain is a gain regardless.  This is the only way the TurboTax program will "correctly" recapture the depreciation and tax it at the ordinary income tax rate, instead of the capital gains tax rate.