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Old 02-10-2014, 08:53 PM
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Any unrecaptured depreciation tax on fully depreciated rental appliances?

1) Is there any unrecaptured depreciation tax on a fully depreciated appliance used in a rental property? I do not have a gain on this appliance and I intend to use it in the rental home till it can't be used anymore. Do I still have to pay unrecaptured depreciation tax (similar to unrecaptured Section 1250 gain) on such fully depreciated appliances when it's time to sell my rental property?

2) If I have 2 years of depreciation claimed on a rental appliance whose initial cost basis was $500 (using Straight Line depreciation, no bonus/additional depreciation taken) at $100 per year, and in the 3rd year, the appliance stopped working. Can I claim a loss of $300 (=$500-$100-$100) for the year the appliance stopped working?

3) If I have 3 years of depreciation claimed on a rental appliance whose initial cost basis was $500 (using Straight Line depreciation, no bonus/additional depreciation taken) at $100 per year, and in the 4th year, I sell my rental home with the appliance and the appliance is still working (i.e. the new cost basis of the appliance is $200 in year 4), do I have to pay any unrecaptured depreciation for the depreciation ($300) I have claimed in 3 years?



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Old 02-11-2014, 01:36 AM
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Quote:
Originally Posted by icewine View Post
1) Is there any unrecaptured depreciation tax on a fully depreciated appliance used in a rental property? I do not have a gain on this appliance and I intend to use it in the rental home till it can't be used anymore. Do I still have to pay unrecaptured depreciation tax (similar to unrecaptured Section 1250 gain) on such fully depreciated appliances when it's time to sell my rental property?

2) If I have 2 years of depreciation claimed on a rental appliance whose initial cost basis was $500 (using Straight Line depreciation, no bonus/additional depreciation taken) at $100 per year, and in the 3rd year, the appliance stopped working. Can I claim a loss of $300 (=$500-$100-$100) for the year the appliance stopped working?

3) If I have 3 years of depreciation claimed on a rental appliance whose initial cost basis was $500 (using Straight Line depreciation, no bonus/additional depreciation taken) at $100 per year, and in the 4th year, I sell my rental home with the appliance and the appliance is still working (i.e. the new cost basis of the appliance is $200 in year 4), do I have to pay any unrecaptured depreciation for the depreciation ($300) I have claimed in 3 years?
1) no; you need to recapture your unrecap depre , sec 1250 exp,only when you dispose of your rental pty in gain after subtractions of NOL(if youhave) or PAL c/o or etc.in my opinion, unless it was used exclusively for biz ppurposes , you can’t apply sec 179/bonus deore on your rental pty appliance and sec 1245 expis not applied to the appliance . Commercial property owners – I mean companies owning rental properties as opposed to individuals owning the properties they rent , may be eligible to claim deductions on appliance purchases, classifying them as Section 179 property. Commercial property owners may qualify to deduct up to $500k in property purchases, including appliances, in 2010 and 2011. Personal estates and trusts may not make deductions based upon Section 179, so most private landlords who have not incorporated will not be able to take advantage of this deduction;so you do not recap sec 1245 exp on the disposition of the rental pty.



2) I guess aslongas you repair a broken appliance, that is a deductible repair expense. If not I do nottthink so;you can contact the irs for more info in detail



3)
as mentioned above no since the appliance
In the rental pty is not subject to special depre, sec 179/bonus depre, so you do not recap the unrecap sec 1245 exp on the sale of the rental pty.



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Old 02-12-2014, 08:00 PM
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Thank you for your answer



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