Thank you. I don't understand the tax fairness in deducting from the adjusted cost basis, depreciation that was never taken on the property before its conversion, and I would like clarification. You are saying that if a property had a cost of $200,000 and was held for 13.75 years before being converted to a rental property, and then was sold a year after the conversion, the adjusted basis would be $100,000 (ex. capital improvements) plus one more year depreciation (post-conversion) even if the $100,000 depreciation deductions had never been taken (since it was a second home)? Or are you saying that the one year of depreciation following the conversion to a rental property needs to be deducted against the adjusted cost basis only?
