Quote:
Originally Posted by Gnomes
Newbie landlord here, Is rental property considered as capital income? I have some lost mutual funds from previous years and line 253 apparently wont work.
How do I claim property depreciation on the rental unit if I lived in it during year 1? (it was rented out year 2, 2015 onward)
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Rental income is not considered capital income. I wouldn't claim depreciation against rental income because you may have to pay a lot of taxes if you decide to sell the property.
The "recapture" of the total depreciation expense amount you claimed will turn into your taxable income when you decide to sell the property. The recaptured amount is 100% taxable, whereas Capital gains from selling the property is only 50% taxable.