@jtax
The PAL carryover is not limited to 10 years.
You are right. I already corrected this initial statement soon after posting. I was thinking of FTC carryover instead of PAL. This doesn't not change the validity of my original statement. I also made an additional post illustrating how the FTCs created by deprecation can expire without having a chance to ever claim them. I would be interested to hear your thoughts on this.
When you adjust basis on rental real estate (maybe with no accelerated deprecation), you are getting a subtle tax break. Your depreciation deduction reduced ordinary income, but you the basis adjustment upon sale taxes you at capital gains rates.
This is not correct. Having recently paid capital gains on an investment property, I know this from firsthand that the total depreciation over the years is taxed at ordinary income tax rate up to 25% and not at CG rate. Here is an external link explaining this clearly: https://inside1031.com/depreciation-recapture/
