Single client owned a 2 family (1/2 rental) for 30 years. Stopped renting 5 years ago and left rental unit empty. I have deprecaiton schedule up to the period when she stopped renting. Sold property in 2022. How do I get the program to recapture the depreciation taken while a rental? If I enter the amount of depreciation taken on home sale worksheet, it doesn't seem to tax it at the 25% rate, simply lowers the basis. Any help is appreciated!
Thank you. I figured out that it was calculating the 25% rate on the section 1250 worksheet, but as you mentioned was not charging the 25% rate as per the schedule D worksheet on lines 35 through 40 Thank you all for your responses!
If you use the home sale worksheet I believe that will only show basis adjustment. the tax will be figured on the "tax smart worksheet". Did you look there, as it should show the recapture tax from form 8863
Thank you. I saw those lines. The problem is the program isn't calculating the 25% tax rate on depreciation recapture. Schedule D Tax worksheet only calculates 15% and 20%. Doesn't separate the depreciation. Any ideas appreciated!
Thank you. My understanding is that depreciation recapture for the section 1250 gain is always 25%. In the past when doing sales, as long as I sold the assets on the depreciation schedule the 25% rate would populate. The program just does not seem to isolate that line on the home sale worksheet and separate it out for the 25% treatment; instead just taxing it all at the long term rates. Not sure if there is a work around or if I am not understanding the tax law. Thanks!
Thank you. I figured out that it was calculating the 25% rate on the section 1250 worksheet, but as you mentioned was not charging the 25% rate as per the schedule D worksheet on lines 35 through 40 Thank you all for your responses!
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