Should I include rental property depreciation for a retirement home?

[rrcosta2]

I purchased a retirement home in 2017, and then rented rented it since I was not retiring until 2018. I'm using Turbo Tax Premier and it shows depreciation in addition to my other expenses for the rented home. I am planning to sell my main residence in 2018 and move into the retirement home, and not sure if I should leave the depreciation in my 2017 return.

[Coleen3 · Accepted solution]

Yes, if it was rented in 2017 you should include the depreciation. You will have to recapture the depreciation whether you take it or not.

Basis adjustment for depreciation allowed or allowable. You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). Pub 946