Q. Are you saying that there are no deductions of any type that I could claim because of that personal use?
A. Yes, generally. In particular, you can not claim a capital loss on personal use property.
But, you can reduce the taxable amount of depreciation recapture, by the capital loss (so some of the loss is effectively deductible).
Using two examples ( In both examples, you have a $15,000 loss, on the sale):
Example 1. You claimed (or should have claimed) $18,000 of depreciation while renting it out. You have $3,000 of taxable income (18,000 - 15,000 = 3000).
Example 2. You claimed $10,000 of depreciation while renting it out. You have a net $5000 loss (15,000 - 10,000 = 5000). You may not deduct that $5000 since it was personal use property. But, you don't have to pay tax on any of the $10,000 depreciation recapture.
