If you had any suspended passive losses associated with the property, you can deduct them in the year you sell the house. The gain on sale if any will be taxable as ordinary income up to the amount of the depreciation on the house (capped at 25%) and the rest is taxed at capital gain rates. So, if you reduce the accumulated depreciation you may shift more of your gain from ordinary income to capital gain income, but you're not going to change the amount of gain subject to tax. Also, the depreciation amount you use for the depreciation recapture is the amount that should have been taken on the property, not what you actually deducted. So after you amend your return the depreciation recapture should remain the same. The only difference will be you'll have a smaller loss in the year amended, which will reduce your passive loss carryover.
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