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Author: RIBBIT1 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Recapture Depreciation Date: 2/25/2001 6:07 PM
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I was just reading the "Fools" article on Making Home Sale Capiital Gains Disappear, in the example under Rental Conversion, the fool talks about recapture of depreciation and what is forgiven for any depreciation taken prior to May 6, 1997. My question is if I sell the rental property without living in it and NOT claiming it as a primary residence and with out claiming the "gain exclusion", will the amount I depreciated prior to 1997 be also forgiven and what would the basis of the rental be at the sale of the rental? Thank you in advance.

Answer
Read the instructs for form 4797 Sale of Business Property. You'll probably be hit with a 1250 gain, which is taxes as ordinary tax rates. The rest will be at capital gains rate. Its a bit tricky, but you can finish the form. Good luck.
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