I was reading IRS publication 523 to figure out how to account for my duplex sale. I've owned the property for 30 years, so you know how these things can get complicated...
First of all, the second floor was rented as it's own apartment and it is 35.5% of the whole house. I rented the basement bedroom, which has gone through several refrigerators in 30 years. The upstairs apartment also has had several full sets of appliances in 30 years.
From reading publication 523, it looks like I need to recapture the 35.5% depreciation on the second floor, but not the rest from the basement rental, because that is considered a spare bedroom in my "home" portion of the house. According to their worksheet, the basement portion of the depreciation gets figured into the gain on my home portion to determine whether I go over the $500,000 limit for a married couple that would make that portion of my gain taxable.
1. The first question is am I right that I don't have to recapture the "home" portion of the depreciation?
2. The second question is... Do I recapture the gain on appliance depreciation?
3. How do I account for depreciated appliances that are gone, versus depreciated appliances that were sold with the house in the home or second floor apartment? (Let's say they had a value of $900 for the second floor and they were 100% depreciated. The basement fridge and washer / dryer were all but $150 depreciated and were worth $850 all together. Some appliances were listed as 179 depreciation back in 1996-1999.)
My first husband died in Sept. 2009, So I stepped up the value of his half of the property and am still depreciating his half of the house. I am not planning to recapture his half of the depreciation from 1990 to Sept. 2009. (I am not in a community property state.)
4. Am I right that I just ignore his portion of the depreciation taken up to Sept. 2009?
I hope you can answer some of these, because it is hard to find answers beyond the basic stuff.
