I purchased a duplex 2 years ago and rented out both units. In 2000, I moved into one of the units and I plan to remain here for couple years or so. At that time, depending on circumstances, I will either return both units to rental or sell the duplex.My understanding is that I need to recapture 50% of the amount I have depreciated so far. I can claim 50% of my mortgage as a business expense, and the other 50% as an itemized deduction.Is this correct? And what are the consequeces if I decide to sell or rent in two years?TIA
Try IRS Publications 527 and 544, they deal with your questions. I'm not shure about the recapture since you haven't sold anything, but the rest seems correct.If you sell in two years it's half personal and half business. If you're in it two years, you get the exemption for sale of a personal residence. If you rent the unit you were in you start depreciating on the then current FMV.
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