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December 27, 2024
Question

Depreciation Recapture on Home Office Which Began 2 Years After Initial Purchase

  • December 27, 2024
  • 1 reply
  • 0 views

Hi,

 

In preparing for my 2024 tax return, I have a question regarding depreciation recapture.  I sold a home in 2024 which I initially purchased in 2018.  I started a consulting business in mid-2020 in which I operated out of my home and for my 2020 return, I filed using the regular method and took a partial year depreciation expense.  Now that I've sold the property in 2024, would I only report the actual depreciation I was allowed or allowable for 2020 forward and not any for 2018 and 2019?  It doesn't seem correct to have to report for depreciation for years 2018 and 2019 when I didn't have a business (Sch C) or take any depreciation deduction on my return.  I appreciate any feedback on this.  Thanks!

1 reply

December 27, 2024

Correct.

 

You (1) did not claim depreciation and (2) were not legally allowed to claim depreciation in 2018 and 2019, so those years do not affect calculation of tax on depreciation.