Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
This is my 1st posting… I have acquired a few rental properties in the past 3 years. Due to the depreciation deduction on the tax return, I have always been able to take the max $25,000 passive activity loss with sever years’ worth of carry over. I wondered if I could skip claiming the depreciation expense on my rental properties so that I would not have to recapture it at the time when I sell the rental property. After some research, I found 2 answers: 1: at the time of the sale of the rental properties, I have to reduce my purchase price with all the rental depreciation REGARDLESS if I actually claimed them or not on my tax return over the years I am renting them out; 2: I only need to recapture the depreciation I ACTUALLY TOOK. Can any authority here give me an affirmative answer? It seems to me unfair that I have to recapture all the depreciation regardless if I took them or not. However, if that’s true, how do I plan ahead to minimize this recapture tax? By the way, I do not have other “passive activities”, which means that all those rental activities carry-over loss is wasted each year. Is there a way to use this loss offset the gain at the time when I sell my rental properties?
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.