@Carl wrote:
In a worst case scenario, the property owner dies, the estate sells it, and the numbers used in the sale raises flags at the IRS resulting in an IRS "claw back" to the estate from the beneficiaries of the estate to do things right.
There is no "clawback" after the death of the owner from the beneficiaries, however.
Regardless of how the owner handled depreciation, the property is stepped up to its fair market value on the death of the owner and accumulated depreciation disappears.
Further, although recapture is a requirement per the Code, depreciation deductions are not. Per Section 167, depreciation is "allowed".
Finally, care needs to be taken with respect to relying on IRS publications as they are not authoritative (as are the Code, Regulations, et al). There have been errors in prior publications so caution is warranted and the material should always be checked against the Code and Regs.
