2nd residence sold, has deprec from rental as vacation home

[jklcpa]

Client sold a beach condo that was rented for a few years back in the mid-2000s. Depreciation was limited by the vacation home rules and had a carryover of disallowed depreciation.  That depreciation would never be allowed due to the vacation and personal use limitation.  Condo has been out of rental status since 2008 or 2009 and I removed the asset listing because if I left it in, the software was looking for a Sch E that didn't exist.

My question concerns the disallowed depreciation. The depreciation schedule showed 61234 as accumulated depreciation, and the disallowed portion that was never taken is 13225. What figure should I report on the Form 4797 as depreciation allowed or allowable, the full amount of 61234, or 48009 that is net of the amount never deducted anywhere?

All the facts:
Selling price   495,000
Cost               260,000
A/D allowed     48,009  (this is net of the 13225 never deducted on any return)
Sell'g exps       32,940
Gain               250,069

So, should I report it like that, or should I report the full deprec of 61234 and adjust the line for the cost and selling expense so that the gain works out properly?

Sorry if this seems simple, I'm really starting to doubt myself the more tired I become.

[Terry D EA]

Judy it would seem to me that the depreciation that would never be allowed due to the limitation within the vacation home rules would not be part of the sale calculation. I know you're tired but I think you hit this spot on.

[jklcpa]

Thanks Terry.

[Gail in Virginia]

I agree - the depreciation was disallowed because of the limitation on vacation homes, so it was neither allowed nor allowable.  I think all of us are too tired to tell what we know and what we don't know. One more month. 

[kcjenkins]

I agree, the 48009 that is net of the amount never deducted is what was both allowed and allowable.  

[jklcpa]

Thanks the for help. I'm glad people are agreeing. I have it printed out now and ready to go.

 

It's so much easier to answer others' questions and see the bigger picture than it is with my own clients' problem returns. 

[kcjenkins]

Yes, that's true for all of us.