You inherited in 2024 and sold in 2025. I am going to assume it was rented when you inherited it and you created a new Sch E for you using the basis at the time of inheritance. Because you held the p...
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You inherited in 2024 and sold in 2025. I am going to assume it was rented when you inherited it and you created a new Sch E for you using the basis at the time of inheritance. Because you held the property such a short time, a capital loss makes sense. The depreciation is part of the basis in the capital gain equation.
For example:
You inherited house worth $250,000 of which $50k was land value.
Let's say you depreciated the property for about a year about $7200.
When you sell the house, you don't list your basis as $250,000.
Instead your basis is $250k -$7200 =$242,800.
If you sold for $235,000 - you lost money and the depreciation is already accounted for.
If you sold for a gain, say $252,000, then the depreciation claimed would be part of your gain/recaptured.
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