Is Depreciation Recapture Tax not applicable after 8.5 years?
Hello!
Quick question regarding depreciation recapture. I was thinking about selling a two family house I own in Somerville, MA while my 2/5 year owner occupant tax exclusion still applied for half of the house. I decided not to because I've been depreciating the rental portion of the house since 2011, and my CPA told me that the capital gains I would save would be offset by needing to pay a hefty depreciation recapture tax. After 8.5 years of owning it, however, he said that I would no longer need to pay a depreciation recapture tax.
Is that accurate? I haven't been able to find any info online to verify that, and I recently repeated the 8.5 year rule to an investor client of mine who looked at me like I had two heads. Any help anyone may have would be greatly appreciated!