Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago,

User Stats

17
Posts
0
Votes
Dan Earl
  • Moody, AL
0
Votes |
17
Posts

Is it possible to minimize taxes on depreciation recapture?

Dan Earl
  • Moody, AL
Posted

Let's say you have 1 rental and no other type of income.

Rents after mtg interest, Property taxes and insurance brings income to under 9k and therefore no taxes are owed in this situation. No other expenses for this example.

You then have to include depreciation, but it provides no tax benefit. Depreciation does not create a loss.

This happens year after year for many years.

So in this case depreciation seems to only hurt since it adds up year after year until the property is sold and then you pay taxes on this accumulated depreciation if there is any profit from the sale, but it does nothing to help pay less taxes year after year since income is low anyway whether you include depreciation or not.

Since depreciation is mandatory to include regardless if it helps you or not lower your tax liability, Is there a way to minimize the taxes paid on this depreciation recapture at the time of sale assuming there would be profit?

Trying to find something positive from this scenario.

Insight on this is appreciated and please correct me if I am wrong too.

Thank you. 

Loading replies...