taxn00b Posted March 22, 2021 Report Share Posted March 22, 2021 TP sold a rental property (acquired as a personal residence in 2008, converted to rental property in 2011, sold in 2020). They didn't take depreciation for the entire time they had the rental property. They have to recapture the greater of the depreciation they took and the depreciation they could have taken - right? (Which the greater of that is most definitely the depreciation they could have taken). If so, then the amount of the depreciation would be treated as ordinary income? Or LTCG? (I thought the whole point of recapture is to treat it as ordinary income rather than LTCG). If it is treated as ordinary income, I don't know what I'm doing wrong, because it is not being calculated as ordinary income on 4797. What am I doing wrong/missing? TIA Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 22, 2021 Report Share Posted March 22, 2021 1250 is sort of a hybrid, taxed at a maximum capital gain rate of 25%, thanks to the strong lobby arm of the real estate industry. The recapture should show up near the bottom of the tax worksheet for Schedule D. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 22, 2021 Report Share Posted March 22, 2021 1 hour ago, taxn00b said: They didn't take depreciation for the entire time they had the rental property. And you are claiming on 3115 code 107. 1 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.