I'm really worried now. I have a rental home I bought in 2005 and want to sell it. Upon reviewing all my tax forms, I've noticed that TurboTax has always calculated the depreciation, but never allowed me to take it as an offset to income. I assumed it was because I always had about a 20K/yr loss on the property. But now I'm not sure. If realized the total depreciation over the 14 years I've owned it would be $269,818. That would be a large bill if I had to pay 25% tax on that, especially when I never benefited from the depreciation. Additional information would be my projected Capital Gain amount at sale ($182,400), and my Passive Loss Carryover amount (-$228,194). I'd appreciate any help you can provide. Will I have to pay taxes on this sale and if so, how much? This will determine whether I can outright sell the property or do a 1031 exchange instead.
