Blaine is a practicing dentist. He operates his business from the basement of his house, with a separate entrance and facilities. Blaine uses the simplified method every year to calculate his business-use-of-home deduction. How will he calculate his depreciation for recapture when he sells the house? He will divide the basement square footage by the total square footage, multiply that percentage by the fair market value, and use the depreciation tables to calculate allowable depreciation to be recaptured. He will take the total fair market value of the home and use the depreciation tables to calculate allowable depreciation to be recaptured. Blaine has no depreciation to recapture. He uses the simplified method every year which means his depreciation is considered to be zero. Blaine will use Form 4797 to calculate the allowable depreciation amount and recapture that amount.

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