Would I have to cut past the dead part into living tissue?

Yes, just above the dead area.

There is no aiptasa or algae around my acro so what else that I can do to see what the problem is before I start cutting off my colony's base?

At this point it doesn't matter. It won't grow back. Cut the dead off, re-utty it into place and let it encrust the putty. It's not a lot, and it's dead skeleton.

+1. Not sure why corals do this, but once the base has died they never seem to re-encrust over it. The second you cut them at living tissue and re-mount them... Plating explosion.

I will frag off the base tomorrow and give the colony a revive dip before I epoxy it. Should I coral dip the that piece of live rock as well to get rid of w.e causing the recession?

No, not really a concern. It just receded at it's base, they do that sometimes.

Hey aquattro I followed ur advice and fragged off the base. I was actually quite sad after doing so cuz it was almost 2" that had to be thrown away.

http://i1292.photobucket.com/albums/...psd49818ef.jpg

I also have another concern for a different acro. It to had very bad recession and rot all over its top half since i got i so I fragged it off as well. But there's a lot of this white stuff near its base that seems to kinda resemble feather dusters with only 2 antennas comin out of each white tube. Is this normal? Should I manually remove each one? Also what type if acro is this? It has 2 tones purple/blue

Don't be too sad, it should grow that much more on top :) I had a similar issue with a large purple stag, I had to cut off about a pound of skeleton :)

I wouldn't worry about the little critters growing off the base, I've had these too, just little worm guys.
No real way to tell what type of acro it is, just some sort of stag.

Oops forgot to post a pic http://i1292.photobucket.com/albums/...ps8ae6d3d3.jpg