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Returning Member

Recapture depreciation, Donated real property

I donated a rental property to charity. How and where do I report the recaptured depreciation?

2 Replies
Level 5

Recapture depreciation, Donated real property

From Zacks -- One of the biggest benefits of donating rental property is that the deduction is figured on the property's fair market value. For example, if you bought a rental home for $50,000 and claimed $20,000 in depreciation on it but it had a $100,000 fair market value, you'd be able to write off the $100,000 value. While the IRS sometimes limits your ability to donate depreciated properties, this limitation doesn't apply to depreciated real estate. When you donate property, you will need to have a professional appraiser prepare an appraisal report to establish its fair market value.

Returning Member

Recapture depreciation, Donated real property


So, Do not concern myself with prior depreciation, just put FMV (appraised value at time of donation) on schedule A and attach Form 8283 section B. No need to use Form 4797 to figure recapture and report as ordinary income on schedule C.  Even though the property was depreciated over a period of years. The FMV is far more than the Adjusted basis.

Since there is Up to 40% penalty if reported wrong, please be specific as to forms and procedure. 

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