A little rusty but.....Purchased a house in 2008. Moved out in 2012 but wanted to keep the house so I converted to rental property. Sold house in 2020
My annual depreciation for purchase price is $175,000/27.5 = $6,363
Adjusted cost basis is $175,000 - ($6,363x8) = $124,096
Realized gain is $175,000 - $124,096 = $50,904
Unrecaptured gain is $6,363 x 8 = $50,904
Capital gain is $50,904 - ($6,363x8) = $0
My question: Is it the unrecaptured gain that is being taxed?
