Paramount don’t fret to much. Even if you did not depreciate the property (I believe) the govt still recaptures depreciation! Pretty crazy huh? Anyways if you do sell it you will be taxed on the depreciation recapture, however the money saved on taxes over the years you did depreciate it tends to match or exceed that. Also if you have gains on the sale from a pure cost basis standpoint (forget about the depreciation recapture for a moment) then you can write those gains off against any capital losses you may be carrying forward. If you don’t have any and you have to pay taxes on gains and recapture that is not the worst thing in the world is it?
The other option to avoid it all is to 1031 it but that probably doesn’t work for you. If you think the sky is going to fall then bail out altogether. Personally I would hold the property, even if you do move out of the state.
