I have a question regarding a rental property and how to handle the recapture of the depreciation.
I had a rental property for many years and it was always making a profit. In those years, the home was listed on Schedule E and was depreciated as normal, but never fully depreciated. (Even at time of asking this)
In a prior year when my tenants lease ended, my new tenant became a family member who I charged far below the market price which would classify the property as a "Not for Profit" rental under Pub 527 Pg 25. I was renting this property to them to help them and in no way intended to make profit from them and the income was reported on the 1040's Other Income section. The mortgage interest and property taxes were taken on Sch A instead of Sch E. At this point, I no longer filed a Sch E.
Currently, the family member is still a renter and and at the end of their lease, I am considering selling the property. When/If I sold it, would I still have to recapture depreciation as normal? Is there anything that I should know about this specifically? I know living in it for 2 years could activate the exemption for income, but I don't want to live in it.
Any help would be amazing!
