Discussion:Sold property containing business in home

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> Sold property containing business in home


Truthseeker (talk|edits) said:

8 January 2007
TP sold primary home containing Daycare business. TP had been claiming percentage of home depreciation deduction since start of business in 1994. TP sold property at a gain($80K), and is married. The gain is less than $500k. It's my understanding that there's no capital gains on the business portion of the $80k. However, the TP will have to pay taxes on the recapture depreciation. Is this correct ? Also, would this recapture amount go on form 4797, or straight to the SCH D ? Also, I read somewhere the recapture depreciation is taxed a flat 25%. Any insight here would be appreciated. Thanks

Death&Taxes (talk|edits) said:

9 January 2007
Your take on it is correct; your software should have a home sale worksheet which should transfer the depreciation to the proper lines of Schedule D.

Solomon (talk|edits) said:

9 January 2007
1250 unrecaptured depreciation up to 25% - not necessarily a flat 25% - depends upon the other taxable income.

To join in on this discussion, you must first log in.
Personal tools