6. Selling a rental property? Decrease your tax burden

What is Recaptured Depreciation?

Recaptured Depreciation is Taxed When You Sell Your Rental.

There are tax advantages to owning rental real estate. As a homeowner, you can deduct expenses including property taxes, maintenance expenses, insurance premiums, mortgage interest, travel costs, and interest and fees paid on borrowed funds used to improve the home. You can also take advantage of a property depreciation deduction each year. Imagine that, taking an annual deduction on an investment that’s likely appreciating in value, not depreciating! Unfortunately, the depreciation tax deduction needs to be recaptured when you sell.

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