If we no longer depreciate our home for small business, will be need to recapture eventually when we sell?

Question

Because of heath issues,we are cutting back and may not claim home office at all. We have depreciated the house about $6000. If we sell it in 10-15 years, will we need to recapture the depreciation?

Answer 1

Yes, it doesn't matter that you stop depreciating.  The depreciation (technically "cost recovery") you have taken has reduced your tax basis in the property.

When you sell, you will calculate your gain by subtracting the basis from the sales price.  The portion of the gain that is due to cost recovery will be taxed at ordinary income rates, the rest will be capital gain.

At least that's how it works now, who knows what the tax law will look like 10 - 15 years from now.