Read Millionaire Fastlane
I've Read UNSCRIPTED
- May 2, 2017
Yes, this was what my memory was telling me (but my memory lies sometimes).According to this, in most cases, you can't use your 121 exclusion to avoid recapture:
If you are working from home or thinking about working from home, you may be able to reduce your taxes by deducting otherwise nondeductible personal expenses attributed to your business. Where and how the home office deduction is claimed depends on the type of business entity. In this article...www.americanbar.org
"If you used the regular method to calculate your home office deduction, you must recapture, or pay back, all the depreciation you were entitled to take on your property (generally at a 25 percent rate), when you sell your house. This applies whether you actually expensed the depreciation or not. Depreciation deductions (which apply to only business – not personal – property) decrease your property’s basis, so that, when you sell your residence, it results in a greater gain. This gain, attributable to your depreciation deductions, is not excludable under IRC section 121, discussed below. On the other hand, if you used the simple method, there would be no depreciation deduction, no change in your house’s basis, and no recapture of depreciation on the sale of your residence."
Given the earlier responses, I wasn't inclined to spend a lot of time double-checking my memories.
Don't like ads? Remove them while supporting the forum. Subscribe.