Question

non-deductible depreciation expense

Forum|Forum|2 years ago
March 6, 2024
1 reply
0 views

Sold vacation rental after using it/renting it for a few years. I understand how to determine the basis of the property. My question is do I have to deduct the amount of depreciation that was not allowed due to Vacation Home Loss Limitation from the basis?

A

Anonymous_

Employee

The amount would be that which was allowed or allowable.

In your case, those figures are the same; you were only allowed to deduct the amount not due to the loss limitation and that amount was the amount of depreciation allowable. In other words, there would be no recapture (or reduction in basis) of the amount that was not allowed to be deducted.

G

Gas6Author

Thank you for your quick response to my question regarding depreciation expense. My brain is a bit foggy after reading through lots of IRS publications. So it is your opinion that since depreciation expense was never reported on Schedule E due to Vacation Home Loss Limitation that the basis for sale is not reduced by the accumulated depreciation amount carried forward?