Depreciation Recapture

[Cjschade]

I sold a building for $233,507 that I worked in, and that I rented to another tenant for 19 years. My Depreciation Cost/Basis is $232,352, of which $163,696 is for the Building itself. My total Prior 179/SDA/Depreciation to date is $91,535. My gain on the sale of the Building itself I believe is calculated to be $69,811 [233,507-163,696] .

Do I calculate my Dep.Recapture by adding the $69,811 gain to the total Depreciation expenses of $91,535 for a total of $161,346?

I entered that figure into the caluclator Long Term Gains, and was shown that my Long Term Capital Gains tax owed would be $13,339 at an effective rate of 7.96 with the tax bracket at 22%. 

Do you agree with my calculations?  

Sincerely,

Craig Schade

[phone number removed] if  you prefer to text or call.

[Anonymous_ · Accepted solution]

You still need to reduce your basis (in the building) by the accumulated depreciation.

[Mike9241]

on what schedule have you been reporting the building and depreciation or did you report the rental portion on schedule E page1 while your business portion was depreciated on another schedule?  you say you worked in the building so that portion should have been deprecated or at least that portion that was used strictly for business if it was used as your residence.  what about the land cost? that's not depreciable.

overall gain is sales price net of selling expenses 233507

less the cost of the land and building  evidently  232352

plus the depreciation the larger of allowed or allowable 91535

 im not sure why you are saying the cost basis was 232352 of which the building was 163696.   why the difference?

the gain in excess of the depreciation recapture is taxed at one rate depending on your other income 

depreciation recapture is tax at most 25%