depreciation recapture

5 replies
45 views

I have entered all the required information related to sale of long term rental residential property. On form 4797, I show a gain on the sale of the house (sales price minus adjusted book value). From everything I read, I anticipated some depreciation recovery showing up on line 31 of Form 4797. I entered the sales information for the land and the house in the depreciation section of the rental income section, anticipating all necessary forms would be completed but now I am not so sure. Does anyone have any insights on how this works?

Not A Product Question

Anonymous_

Level 15

Are you using a desktop version of TurboTax? If so, enter Forms Mode and look at Form 4797 (Part III).

You should see depreciation allowed (or allowable) on Line 22. The program will calculate the correct tax rate on any recapture.

dj772Author

Level 2

Thanks for your response. Am I correct that the difference between the allowed depreciation on line 22 and the cumulative depreciation taken is the depreciation recovery? I cannot find a worksheet showing how the allowed depreciation is calculated. Any suggestions?