I will lose being able to claim the depreciation amount that is amortized over the 15 year period?
Two things:
- No. When you sell the property, you are required to recapture the depreciation and pay taxes on it in the year of sale. That's basically decreasing your cost basis. Two things are likely/possible with that.
1- The recaptured depreciation is added to your AGI.
2- The recaptured depreciation has the potential to bump you into the next higher tax bracket.
- Next, residential rental property is not depreciated over 15 years. It gets depreciated over 27.5 years.
