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Updated over 3 years ago, 04/20/2021
Total recapture depreciation when selling an house
I am trying to figure it out how to identify the total recaptured depreciation to report for tax purpose as result of the sale of rental property. The first realization is that this is a TOTAL recapture depreciation and not just the larger one coming from the building; correct? Basically I need to account for all the smaller items (sink, washer, dryer, carpet) even if those items were fully depreciated years ago? Some items are not even anymore in the house i.e carpet replaced with tiles..
The tax software I use H&R does seem to just show the depreciation summary for each year and not the total. I am afraid I need to go through all the 10 years of rental history and do some math!!
Reading Section 1250 I believe that the recaptured depreciation will be taxed at ordinary capital gain (with max of 25%) while the rest of the profit as long term at 15%. Can I offset the amount taxed at 25% tax with short term capital loss I have been carrying on Schedule D?
H&R does not inspire confidence in this .. they just have a note " use business asset sold topic"