Depreciation recapture

[Questionguy101]

If a rental property is sold at a loss (a loss after reducing the basis by depreciation claimed before already), is it possible that the taxpayer still have to pay tax on the depreciation recapture?

For example,

Property adjusted basis $100,000
Depreciation claimed: $20,000
Selling price $70,000.

So the property has been sold at a loss of $10,000.

But does the taxpayer still have to pay tax on the $20,000 depreciation claimed since it has been used to offset ordinary income before?

I think I am a little confused because if the property has been sold at a gain, the capital gain and the depreciation recapture would be taxed differently.

[Burke]

Depreciation recapture as calculated on Sche D, is only attributable to property sold at a gain. If it is sold at a loss, this does not come into play.

[taxmom34]

doesn't depreciation recapture transfer from form 4797 directly as ordinary income? or does it not work that way for a loss?

[Burke]

Only if it is a gain. Think about it. 1250 recapture is taxed at a maximum rate of 25%, not 15%. Hence the separate allocation on page 2, Sche D. This is so the software can calculate the tax. If there is a loss, there is no special rate or allocation.
Refer to TTB, page 6-12 & 13. Specifically, the example at bottom of page 13 re: allocating gain on the sale of Section 1250 property. You do this allocation only when there IS a gain. Not a loss.

[PIGLEE]

I have a similar question that I have not done any research on yet. Client had office in home, and took depreciation. Home sold for a loss, a big loss. Can the loss on the % of business use be deducted on tax return?