Do I have to to take depreciation - Posted by Pradeep Rijhwani

Posted by John K Haslach, CPA, MST on April 28, 2006 at 14:54:07:

The sale of property is reported on Form 4797 and the gain is calculated on Schedule D. Don’t try doing it yourself, get either Turbo Tax or Tax Cut and left the software perform the calculations. The software costs $20 or so. It is NOT worth the headaches trying to do it yourself!

Do I have to to take depreciation - Posted by Pradeep Rijhwani

Posted by Pradeep Rijhwani on April 10, 2006 at 10:46:09:

Friend of mine told me that I have to take depreciation on the two condos that I own and use as rental properties.

According to tax code 527 it looks like I am forced to take the depreciation even though I do not want to for reasons of Alternative Minimum Tax and depreciation recapture.

http://www.irs.gov/publications/p527/ar02.html#d0e2438

Any suggestions of how I can not take depreciation so I am not hit with the depreciation recapture when I sell the properties.

Re: Do I have to to take depreciation - Posted by John K Haslach, CPA, MST

Posted by John K Haslach, CPA, MST on April 10, 2006 at 12:26:47:

Yes, you do have to take depreciation. If you don’t take it, when you sell the property, you must reduce your basis by the amount of depreciation you should have taken and recapture the depreciation.

Recaptured depreciation 25%? as Capital Gain? - Posted by Walt_Fl

Posted by Walt_Fl on April 22, 2006 at 12:17:58:

Hi,

Thanks, Where (Form/Worksheet)is the basis reduced by the Depreciation? Also, where is this ‘Recapture’ tax calculated at 25%?

I seems we are deferring taxes with the Depreciation at 15% (My Bracket) and Paying it back at 25%? This seems to be a confusing Calculation and Concept, Thanks,

Walt_FL

Ps I filed an extension with payment, new rules allow me 6 Months to figure this out, I may have it figured out by then due to the new simplified Tax Code ;0).