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Investors & landlords
The general rule is any gain will be recaptured as ordinary gain to the extent of prior depreciation taken. Any gain in excess of depreciation taken will be capital gain. It is only the capital gain component, if any, that will be used to offset your capital loss carryover.
You can use LTCL carryover to the extent any gain exceeds your depreciation recapture.
Here's more info on Using Capital Loss Carryover against Sale of Rental Property Gain.
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March 10, 2025
3:45 PM