AMT Disallowed Rental Depreciation Deduction; Now Sold Property and All Depreciation Included?

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crazygrow
Posts: 78
Joined: Sun Apr 24, 2016 8:56 am

AMT Disallowed Rental Depreciation Deduction; Now Sold Property and All Depreciation Included?

Post by crazygrow » Tue Dec 26, 2017 12:30 am

Hi,

We sold our previous home turned rental property this year. It was a rental for the past six years. For most of the past six years, I haven't been allowed to take the loss from depreciation on the house due to AMT. Now, when I'm modeling next year's taxes in Turbotax, it is taking the full depreciation amount for the past six years, including "recapturing" depreciation that I never deducted. Hopefully that makes sense.

Is that correct - seems like I'm taking a double whammy - never able to deduct that depreciation and now paying taxes on its recapture?

Thanks.

billthecat
Posts: 278
Joined: Tue Jan 24, 2017 2:50 pm

Re: AMT Disallowed Rental Depreciation Deduction; Now Sold Property and All Depreciation Included?

Post by billthecat » Tue Dec 26, 2017 2:27 am

Didn't they carry forward on form 8582, as part of all your psssive activity loss limitations? You should have two Forms 8582 from 2016, one for regular and one for AMT, that you can refer to.

The idea then is that you do have depreciation recapture, but you also deduct all your accumulated losses.

So i think that if, say, all your depreciation was disallowed and carried forward, it should be a wash at sale.

crazygrow
Posts: 78
Joined: Sun Apr 24, 2016 8:56 am

Re: AMT Disallowed Rental Depreciation Deduction; Now Sold Property and All Depreciation Included?

Post by crazygrow » Tue Dec 26, 2017 4:09 pm

Edit - figured it out! Thanks.

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