The IRS Method or the Tax Court Method are two methods used to determine the allocation of the mortgage interest and real estate taxes between Schedule E (for rental) and Schedule A (for itemized deduction). Depreciation doesn't directly come into play for those methods.
If you have an unallowed/suspended loss (due to depreciation and/or other expenses), once you sell the property, those losses will be unsuspended and will reduce your income. The recapture of the depreciation is on the full amount of depreciation allowed or allowable. Whether you took it throughout the years or when the losses were unsuspended.
See Pub. 527 for more information.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
