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    Rental Depreciation

    Client had a rental property for 4 years and then moved back into rental for 2 years then turned it back into a rental again. What do you do with the depreciation from before? Or do you just start over with the depreciation? I can't seem to find an answer to that question.

    #2
    Depreciation is suspended when the property was taken out of rental. It starts back again where it left off when it is put back in rental again.
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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      #3
      If I'm interpreting ATSMAN's response correctly, I view it the opposite way.

      I think you need to re-start the 27.5 years, using the Adjusted Basis (which accounts for the prior depreciation).


      I was indecisive on this matter for several years, but now I definitely lean towards re-starting the 27.5 years. However, I have never seen any clear, pointed answer to this question.

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        #4
        Originally posted by TaxGuyBill View Post
        If I'm interpreting ATSMAN's response correctly, I view it the opposite way.

        I think you need to re-start the 27.5 years, using the Adjusted Basis (which accounts for the prior depreciation).


        I was indecisive on this matter for several years, but now I definitely lean towards re-starting the 27.5 years. However, I have never seen any clear, pointed answer to this question.
        So the 4 years of depreciation taken is never recaptured?
        "Dude, you are correct" Rapid Robert

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          #5
          Originally posted by Dude View Post

          So the 4 years of depreciation taken is never recaptured?

          I never said that. The first 4 years of depreciation still lowers the Basis. If the property is sold for more than the Adjusted Basis (which includes the reduction of Basis from the first 4 years), there will be Unrecaptured Section 1250 Gain that will be taxed, including the gain based on first 4 years.

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