Rental property - how to complete appliance writeoff?

[ohiwish]

So carpeting is listed as a write-off over 5 years.  I have been noting the years on my forms i.e. 1/5 then 2/5 etc.  I sold the rental house the next year. Can I complete the write off? From my example I would then use 3/5 of the carpeting cost all at once on my return?

[tagteam]

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@ohiwish wrote:

Can I complete the write off? From my example I would then use 3/5 of the carpeting cost all at once on my return?

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You would only use that procedure (total write off) if you scrapped the carpeting (i.e., removed the carpeting and threw it away without receiving anything for it).

If you sell prior to being fully depreciated, the balance is simply added to your cost basis and recovered in that manner, since it reduces your gain (or increases your loss).

[Carl]

Depreciation on rental property and any associated assets are never a permanent write-off unless one of two things happens in your life. In your case for the carpet:
1)  Something happens to make the carpet a total loss, meaning you end up removing it and throwing it out.
2) You die.
When you sell the property and all associated assets, all prior depreciation is recaptured in the year of the sale and taxed. If you qualify for the "lived in 3 of the last 5 years" capital gains tax exemption, the recaptured depreciation is NOT included in the exemption, and WILL be taxed on that recaptured depreciation.