You still owe recapture tax. The IRS taxes depreciation "allowable" - meaning the deductions you were entitled to take, whether you claimed them or not. Failing to take depreciation deductions during ownership means you missed the tax benefit but still owe the recapture at sale. This is one of the most common and costly mistakes investment property owners make. Always claim your depreciation - you will pay the recapture either way.
This article provides general educational information only. It is not legal, tax, financial, insurance, compliance, housing, brokerage, or professional advice. Rules, tax rates, obligations, enforcement practices, and market conditions vary by property, building, contract, municipality, and jurisdiction, and they change. Sellers should consult a qualified attorney, CPA, or other appropriate professional before making decisions based on their specific situation.
From the seller playbook: Depreciation Recapture Planning
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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