Vacant Property Depreciation Recapture

[TerboTacks]

We are selling a vacant rental property and learning now about depreciation recapture. 

We have used TurboTax for the duration of our ownership of the vacant rental and we were not able to depreciate it because it has never been rented.

Since we never used it as income producing, do we still need to pay the assumed depreciation recapture tax when it is sold?

Any input and clarity on this is much appreciated, thanks!

[Critter-3 · Accepted solution]

Wait a second ... you had a rental property that you never rented ???   Did you ever report the expenses on a Sch E ??

That is not a rental property, it is an investment property or second home  that is not depreciated therefore recapture of something that was not required is not required. 

[TerboTacks]

Thanks Critter! Yes, it needed some work to get it to a point to even rent out. We're opting to sell it and just moving on.

I don't think TurboTax ever prompted us for Schedule E. It just asked us if we got rental income from it.

[Carl]

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