Depreciation Recapture: Primary residence, rental, primary residence, rental

[stungerz]

Hi All,

I bought a placed on 12/27/2000 and lived in it through 12/31/2005 (see below for the depreciation amounts).  

I moved back in on October 2018 and turned it into a rental on 7/24/2020.

Is my depreciation for 2020:  $2550 see math:  ((160 days of rental)/365)*5818

Also, what happens to the unused from 2018 and 2019?  Assuming I still have the rental do I just keep depreciating until I use up the total amount?

2006	$                       5,576
2007	$                       5,818
2008	$                       5,818
2009	$                       5,818
2010	$                       5,818
2011	$                       5,818
2012	$                       5,818
2013	$                       5,818
2014	$                       5,818
2015	$                       5,818
2016	$                       5,818
2017	$                       5,818
2018	$                       4,606
2019

[ColeenD3]

Yes, your depreciation is accumulated. Since residential rental real estate has a useful life of 27.5 years, you will have quite a while until it is used up. Once it is fully depreciated, your basis becomes zero and it would be fully taxable at the time of sale.

It's hard to know if your math is correct since you did not give the basis for depreciation. The percentage (except for the first and last years of rental) is 3.636%

[stungerz]

Thanks Colleen,

The I rented it out on 1/1/2006 and the cost basis was $160,000 or $5818 a year.  2018 was not $5818 because I moved back in and lived there until July 24, 2020.  I then rented it out again so I lived in the unit for 56% of the time and rented it 44% of the time.

For 2020, is my depreciation amount $5818 * .44 or $2560?

Thanks

[PattiF]

Since you lived in the house for part of 2020, the depreciation for the rental property would be for the time when it was being used as a rental. It would be $2560.

[AmeliesUncle]

No, it is not $2560.  Are you using TurboTax?  It does the math.

As for how to depreciate it, you should re-start the depreciation (27.5 years) using the LOWER of (a) the ADJUSTED Basis or (b) the Fair Market Value when it was converted to a rental in 2020