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I have Vacation Home Loss Limitations on Depreciation for a rental property. When the property sells, will I need to pay Recapture on the Loss Limitations?


@Carl wrote:

"Passive Activity Loss Limitation" instead of the "Vacation Home Loss Limitations"

For most (and most likely for you too) rental income you receive for real estate is passive income, 


That is not axiomatic; it is not always the case, particularly with respect to vacation homes (see Section 280A).

 

See https://www.irs.gov/publications/p925#en_US_2022_publink1000104578

 

The following aren’t passive activities.

.....The rental of a dwelling unit that you also used for personal purposes during the year for more than the greater of 14 days or 10% of the number of days during the year that the home was rented at a fair rental.

cmg1
Level 3

I have Vacation Home Loss Limitations on Depreciation for a rental property. When the property sells, will I need to pay Recapture on the Loss Limitations?

So, it sounds like a glitch in TTax program where it includes non-allowed (Vacation Home Loss Limitation) depreciation in the total allowed when it calculates the depreciated basis for the sale? If so, any way to bring this t o TTax's attention as anyone not catching this ispaying more tax than they should?

 

Carl

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