deprec recapture exceeds gain on primary residence used for rental 2 of 5 years
Client owned home and lived tin 100% of the space for 3 of the five years. She rented out 80% of the property for the last 2 years of the five, and took depreciation for the 80% space.
Her gain on sale of the home is less than the depreciation recapture amount. If she uses the primary residence exclusion, does she avoid the gain on the sale but owe back ALL of the depreciation? Or does she only pay back depreciation (as ordinary income) to the extent of the gain?
