I have a rental property that has a net loss if claiming the depreciation. Let's assume my rental property net income BEFORE counting in the deprecation is 5k/year and depreciation is 20K/year, so my final rental income is -15K/year.
If I sell the property after 5 years, how much depreciation recapture tax should I pay? Is it 20K*5*25% = 25K or 5K*5*25% = 6.25K?
If it's the former, will claiming LESS depreciation (5K/year instead of 20K/year) bring the depreciation recapture tax down?
