Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
SD1
Level 2

Sold Primary Residence With Home Office That Wasn't Used in 2 Years

Hello - I purchased my primary residence in 2016. From 2016 - 2019, I claimed the home office deduction. In 2019, the business folded and I haven't had any business use or home office in the property since then.

 

I am looking to sell the property this year. When I file my 2021 taxes, am I still responsible for the capital gains tax on the portion of the property I claimed as a home office? Or is it invalid since it is no longer an "active" home office?

2 Replies
Mike9241
Level 15

Sold Primary Residence With Home Office That Wasn't Used in 2 Years

the depreciation you took or should have taken for the home office is taxable as section 1250 recapture. any remaining gain is eligible for the home sale exclusion.

 

ratings image
Hal_Al
Level 15

Sold Primary Residence With Home Office That Wasn't Used in 2 Years

Yes, you still have to pay tax on the depreciation recapture.   Depreciation recapture is taxed at your marginal rate, but not more than 25% .

 

In TurboTax, enter as a home sale.  You will be asked about depreciation previously taken.  It's a simple entry.

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.49m
Members

2.63m
Discussions

Manage cookies
v