Depreciation to reduce cost basis

Forum|Forum|6 years ago
January 19, 2020
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Our Vacation home was rented out 1995 to 2000. Stopped renting after that and used strictly as a vacation home for our use only. Total Depreciation claimed during rental period was about $30 K. Recently sold house (2019). Does the house cost basis get reduced by the depreciation taken 20 years ago? I know I probably have to recapture the depreciation taken but it seems like double taxing if I also have to reduce the cost basis. Any help would be appreciated. Thanks.

Critter

Employee

Yes the cost basis is reduced but you are not double taxed ... of the profit, the portion that is equal to the depreciation taken will be recaptured as ordinary income and then the balance of the gain is taxed as long term gain.