Depreciation Carryover and Recapture questions

[Vik C.]

1) Depreciation Carryover - Let's hypothetically say I have $100K in salary so that I qualify for $25K in passive activity loss deductions. In 2012, I take a $30K net loss from real estate operations. My understanding is I can deduct $25K from my AGI, which brings my taxable income down to $75K in 2012. However, I have to carry over $5K in losses because it exceeds my $25K annual limit. In 2013, I break even on real estate activity. I am at this point allowed to use my carried over $5K as a deduction to my AGI. Right? More broadly, am I allowed to apply this carry over deduction in any subsequent year in which I am eligible?

2) Depreciation Carryover - Let's say I make $200K in salary and am not eligible for the $25K annual passive activity loss deduction. Across the life of my real estate investment, I accrue $50K in depreciation/passive activity loss carryover. I sell the property and break even - $0 profit. What happens to the $50K that has been carried over?

3) Depreciation recapture - Same example as #2, but I actually make a $100K capital gain on sale. What happens to the $50K that has been carried over?

4) Same as #4, but I use a 1031 exchange.

Thanks for any help you can provide on this subject!

[Daria B.]

Oh my gosh I actually understand this. I've been reading and getting "counsel" on the depreciation and loss carry over and the recapture to get an understanding of what has long so eluded me. Thanks!