Depreciation Allowable versus Allowed

[FirstTimeRentalSale]

I'm confused with Allowed versus Allowable in relation to my depreciation recapture. Here are the details (round figures used for ease)

Rental placed in Service 9/20/2021. Basis for depreciation 171,000.

2021 depreciation calculated at $1500

However, because of my personal use days the actual amount of depreciation taken on my Schedule E was $450 (expenses limited to income).

I sold the rental in 2022.

Is my prior depreciation $1500 or $450?

On a related note the excess expenses I wasn't able to take on my 2021 taxes because of the rental income limitation should carryover to 2022, correct?

[Anonymous_]

The depreciation that was neither allowed nor allowable is not subject to recapture (which would exclude the depreciation that could have been deducted but for your personal use days).

[Carl]

You only recapture the depreciation that was "actually" taken. Period.

[Anonymous_ · Accepted solution]

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@Carl wrote:

You only recapture the depreciation that was "actually" taken. Period.

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That would be the depreciation allowed (actually deducted) in this instance; $450.

As a side note, that figure is also the amount of depreciation deduction that was allowable on the facts presented.

[Rick19744]

To clarify this for other readers:

The comment "You only recapture the depreciation that was "actually" taken. Period." is not accurate.

An individual could  take an incorrect amount, which is less than allowable, and in this case, the taxpayer would need to recapture the allowable amount regardless of whether it was actually taken on the tax return.

[FirstTimeRentalSale]

Thank you everyone. That is what I thought, just needed to confirm.

[AmeliesUncle]

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@FirstTimeRentalSale wrote:

Rental placed in Service 9/20/2021. Basis for depreciation 171,000.

2021 depreciation calculated at $1500

However, because of my personal use days the actual amount of depreciation taken on my Schedule E was $450 (expenses limited to income).

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Let's back up a little bit ... did you use the home for personal use AFTER you placed it in service on 9/20/21?  

If you did NOT use it after 9/20/21, you should NOT have entered any personal days.  *IF* that is the case, your 2021 return is wrong and should be amended (you should have claimed $1500 in depreciation, and possibly some other adjustments).

If you did use it after 9/20/21 and that is why it was limited to $450, I agree with the other comments.