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Level 2
posted Mar 14, 2022 11:51:10 AM

Avoid house sale depreciation recapture if not use the rental depreciation deduction

Hi

 

I sold my primary house in 2021, and before I sold it, I rent it for one year in 2020. I found I have to pay the depreciation tax even the total gain is less than 500k exclusion. 

 

My question is, if I did not deduct the depreciation in 2020 tax year (my rental income minus property tax and interest is almost 0), can I avoid claim the depreciation in this year?

 

If not, can I get refund if I file 1040x for 2020 (but my rental net gain is almost 0)?

 

Thanks 

0 3 554
1 Best answer
Level 15
Mar 14, 2022 11:54:04 AM

Depreciation recapture is required when the property was sold whether or not the depreciation was actually reported on a prior year tax return.

3 Replies
Level 15
Mar 14, 2022 11:54:04 AM

Depreciation recapture is required when the property was sold whether or not the depreciation was actually reported on a prior year tax return.

Level 2
Mar 14, 2022 1:29:20 PM

Thanks for your answer

 

So even I did not get any tax benefits (offset the rental income) from the depreciation, I still need to pay the tax of the depreciation part. Is my understand correct?

Level 15
Mar 14, 2022 1:37:55 PM

@lestathc wrote:

Thanks for your answer

 

So even I did not get any tax benefits (offset the rental income) from the depreciation, I still need to pay the tax of the depreciation part. Is my understand correct?

Yes, you are correct.