IRS's Pub 523 says this about selling your principal residence (your "main home"):
"Recapturing Depreciation If you used all or part of your home for business or rental after May 6, 1997, you may need to pay back ("recapture") some or all of the depreciation you were entitled to take on your property. "Recapturing" depreciation means you must include it as ordinary income on your tax return."
This is wrong, isn't it?
What version of Quicken?
That message is supposed to indicate that there is something out of sync between your Quicken account and the bank's server. If you have fields such as Customer ID, Routing Number, Account Number filled in for that account; I would clear them out and try again.
Having said that, I notice that when I create a brand new checking account in Q2005, those fields are not even present. When I initiate a download to setup the account for Transaction Download, and the account is matched and Activated, then those fields show up in my Account Overview. So, I can't figure out why you could not succeed when you created a new account to download to since there should have been no fields to be out of sync ... I think.
If the download continues to fail in your current file, try creating a New Quicken file, setup a new account there, and see if a download will succeed. Perhaps you have some corruption in your Quicken data.
I believe it is substantially correct, at least to the extent of gain on the sale. But I don't like the use of the term "pay back" - I think "add back" would be a better term. And I'd have to double check whether it actually ends up as "ordinary" income.
What don't you like about it???
It's obvious that neither the person who wrote this nor the person who oversaw the job really understood what they were writing about. The two things you pointed out are clear indicators that this paragraph was written to be "close enough for government work."
It says you MAY have to . . .
How can that be wrong? :)
It's substantially silly. If I recall correctly:
Depreciation in excess of straight line is recaptured and included as ordinary income (regardless of May 6, 1997) Straight line depreciation on things not considered real property reduces the basis (regardless of May 6, 1997) ... although, it's 20 years from 1997, and there are few items other than real property which have that long a depreciation period. Depreciation on the structure reduces the basis, and may create "unrecaptured section 1250 gain" (this really did take affect May 6, 1997)
Note the word "unrecaptured"....
-- Arthur Rubin, CRTP, AFSP, Brea, CA
AFAIK, what the pub is *trying* to say - and fails miserably at it - is that any part of the gain from the sale of a principal residence that's caused by depreciation taken earlier isn't eligible to be excluded from taxable income under the "main home" exception. This has *nothing* to do with "recapture" of depreciation.
Yes, the gain will probably be unrecaptured section 1250 gain, but that's *not* what this particular pub is writing about.
Best answer award goes to Taxed and Spent:
"It says you MAY have to . . . How can that be wrong? :) "
Technically the best, but also the least helpful.
Since I thought we just kicked this around in two other threads, if I remember right, I thought I would stop kicking.
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