First off, check to be sure you don't have a Passive Loss Carryover or a Net Operating Loss carryover from last year. Generally when you have more losses than you can claim, the excess loss is carried over to future years (or carried back, in the case of an NOL). If you don't have income to offset the loss before you sell the property, all passive losses are released and available in the year of the sale.
This is the reason why you may be required to claim the full depreciation amount on the State form. In theory, you will claim that expense in the future.
Since the accumulated depreciation on the property increased last year, even though you couldn't deduct the full expense, the actual depreciation decreased your basis in the property. And since you didn't keep the property for its full useful life, you are required to recapture the depreciation that accrued.
IRS rules state that you must recapture the depreciation, even if you didn't take it, and most states follow IRS rules.
Unfortunately, there is no way to avoid depreciation recapture.
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