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Depreciation basis is improvements plus cost of structures: 128K + 80K = 216K.

I think that's $208k.

You are right.

If you sell for a value greated than the depreciated value, there is recaptured depreciation which is taxed as regular income.

Are you sure that it's taxed as regular income ? And not as a long-term capital gain ? This would make the tax situation upon sale after september 2013 a lot worse - paying 28% federal at time of sale, instead of 20%.

Not the full amount, but the amount depreciated is subject to recaptured depreciation.
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