Calculation of recapture depreciation in case of joint survivor

[JoyDee]

What is the name of your state (only U.S. law)? North Carolina

In 2010 I owner-financed rental property I inherited as joint survivor from my husband who passed in 2008. My understanding is that I show my cost basis as one-half of valuation on the 2008 estate tax return. Is that correct? However, I am not sure what to show as recapture depreciation for the sale on the 2010 tax return. Is depreciation calculated using original date (1988) or is it calculated from date of inheritance (2008)?

 

[davew128]

You should consult a local professional. I don't believe your assessment of basis is correct as it doesn't include your 1/2 and you have no depreciation recapture on his half. However many other factors could be in play and you should have someone review the history.

 

[FlyingRon]

YOUR depreciation recapture is based on your depreciation deduction was taken (or should have been taken). If your husband passed in 2008, his half stepped up and his depreciation was wiped out.

Depreciation is calculated based on when it should have been taken (i.e., from the time property was put into service over the period for the applicable depreciation schedule).

Yes, it's a bit confusing especially when you're trying to compute it all after the fact. CPAs live for this kind of thing.