Question

Sale of Home Previously Taken Home Office Deduction with Depreciation

Forum|Forum|5 years ago
December 29, 2020
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In 2020 I sold my home which I previously had take a home office deduction for many years. Included in the home office deduction was depreciation expense. I have rolled my return forward to 2020 and have entered the sale of the home. Turbo Tax did ask me how much depreciation I previously took. But it didn't really do anything. It said you have a loss on the sale of your home, personal losses are not deductible - that makes sense. But don't I need to "recapture" depreciation expense from the years that I took a home office deduction? If so, where do I enter that in Turbo Tax. Also, what do I do about the home that is entered in the home office section. Do I just delete it?

M

Mike9241

it depends on the loss. is the loss computed taking into a/c the depreciation taken? was any portion of the say the house cost $50K and you took $10K in depreciation. if you sold it for $40K net of selling expenses or less there would be no recapture. any amount between $40K and 50K there would be recapture up to the amount of depreciation taken.

if you couldn't deduct all the depreciation due to the business income limit, then the depreciation to be taken into a/c would only be the amount you actually deducted.

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gregsanchezzAuthor

Rounded numbers....Sale of home $509k. Selling expenses $35k. Purchased home for $469k, but did a remodel for $60k, Converted AC to refrigerated air for $16k. So my basis was way over what I sold it for. Depreciation taken in previous years in my home office deduction was $4,379 (so not big dollars). I just don't see Turbo Tax calculating recapture. Maybe because my loss is enough based on your initial comment?