Tuesday, December 13, 2011

Tax return help: Depreciation recapture when selling a rental.?

I sold a rental I had owned for 11 years. I always heard if you use straight line depreciation that you don't have to recapture it when you sell. But when I look now (and TurboTax does it automatically) Depreciation is added to the Original Cost to get the adjusted basis. That means more Taxable Gain I'd rather not have. Am I doing this right? Is the Depreciation added to the Original cost (to get the adjusted basis) even though I used straight-line depreciation throughout the life of the property?

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