To: Don Green who wrote (14718 ) 10/30/2003 2:00:24 AM From: Doughboy Respond to Depreciation recapture would happen regardless of AMT or not. I looked back at the article you cited earlier from Business 2.0, and I guess there may be some special recapture rules for depreciation and the AMT that I didn't know about. But that's one of those things you just can't worry too much about. Chances are, the IRS is so confused by them itself, it won't bother trying to sort it out. I've never been hit by the AMT yet. But I still disagree with your basic premise that the tax laws have changed in such a way as to damage the supports for real estate investment. The tax laws favor real estate investment (some say unfairly) more than any other form of investment. Where else can you borrow virtually all the money you need to invest, get to deduct all the interest, and then get to treat it for tax purposes as a depreciating asset when it in fact is appreciating more than twice as fast as inflation? And let's not get started on the whole 1031 exchange scam. A lawyer has laid out a process for me to "trade" one of my properties in DC for a ski place in Vail via 1031. I can sell it for say $1M, and buy a nice mountain side ski-in/ski-out mansion. If I make it available for weekly rentals a couple of years, I can then convert it to personal use. After that, I can either move into it and take the $500k primary residence shelter; or pass it onto my children at my death with a stepped up basis; or maybe just wait for the day when long term capital gains taxes go to zero. However it works out, Uncle Sam would never get a full cut of tax on the capital gain. Whereas, the desk jockey working for his $30k a year is going to be paying full freight to the federal treasury. Isn't there something wrong with that?
