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<<<<RooCat writes (in part):

IMO, depreciation on your house, if you ever plan to sell, is not worth the trouble, especially since the percentage is fairly small as a rule (square footage used divided by total square footage times 3.4+ to 3.6+% [depending on the year of service]), besides having to recapture as ordinary income.>>>>

Bob writes: "I reply:

I might be wrong, but I believe that recaptured depreciation is not taxed as ordinary income, but is subject to a special tax rate of 25%. So for a taxpayer in the 28% bracket or higher, depreciation followed by recapture still leaves you ahead of the game. --Bob"

Yes, but it is a home that we are talking about --- under certain circumstances gain up to 250k or 500k would not be taxable at all, so 25% recapture of any depreciation is > 0.

Even if gain is not excludible, if home is held for more than 1 year, LTGC rate would apply, and 25% recapture is > 20% LTCG rate.

Only if house is sold and gain is taxed as STCG is 25% recapture better than ordinary income tax rates for certain higher bracket taxpayers.

WRT AMT all bets are off because my knowledge is minimal at best.

Just my $0.02. Regards, JAFO
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