Reply to Depreciation recapture vs. suspended losses on sale of property

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I don’t think you can offset the depreciation recapture in any case.[/quote]

This is my understanding.  This is why we sold our house vs. renting it out.  You can't offset the losses with w-2 income (unless you're in the "business of real estate," but the depreciation continues to reduce your basis, and you lose the residence "safe harbor," so you get hammered on taxes when you sell.  The only way it makes sense is if you plan to keep the house forever and let your kids inherit it, and then they get the stepped up basis (Biden has the elimination of stepped up basis in his platform, fyi). However, in the meantime, you have the hassles and expense of maintenance (which you also can't deduct).  Unless you're in a market that has a ton of room for appreciation, it makes more sense to put your money in a the market.  [/quote]

It isn’t that much tax though. 25% of depreciation claimed. A fraction of a fraction.

I wouldn’t worry about Biden. Carryover basis is too hard to administer. I could see a mark-to-market requirement becoming law for non-real estate assets, though, and would support that 100%.[/quote]

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