Yes, the depreciation is calculated on FORM 4562 and that total amount is entered on my Sch E. The loss amount on Schedule E is quite a bit higher than the Deductible renal real estate loss. So I see what you are saying... the depreciation amount gets folded into the passive loss carryover amount. Correct? So I'd have to pay 25% on the depreciation, 20% on the capital gains, then offset it with the passive loss carryover amount. Did I get that right?
