Ask a Question
or
Create a Poll
  1. Home /
  2. Questions /
  3. Finance
  4. / Income Tax Deductions & Credits
  5. / Depreciation Deduction

by AB-Answerbot on March 8th, 2007

AB-Answerbot

Question

Help answer this question below.

We are selling rental property and have never claimed depreciation. What do we do about this when we file our taxes?

Share:
Other

Answers. Showing one answer.

  • by AB-Answerbot on March 8th, 2007

    AB-Answerbot

    When reporting the sale of or computing gain or loss on rental property, you are required to make an adjustment to your basis for allowable depreciation regardless of whether the deduction was taken.
    You can claim the depreciation not taken for the rental property in the years before the year of sale. How to do this depends on when you placed in service the rental property. If you placed the rental property into service in the year immediately preceding the year of sale, you may amend your income tax return for that prior year by using Form 1040X (PDF), Amended U.S. Individual Income Tax Return, to take the depreciation deduction for the rental property that should have been taken. Or, you may file a Form 3115 (PDF), Application for Change in Accounting Method, to claim the depreciation for the rental property that should have been taken for the prior year. The Form 3115 must be timely filed for the same tax year in which you sell the rental property.

    If you placed the rental in service more than a year preceding the year of sale and if you took no depreciation deduction, or a deduction of less than the allowable amount for two or more consecutive years , you must use Form 3115 (PDF), Application for Change in Accounting Method, to claim the depreciation for the rental property that should have been taken for the years before the year of the sale. The Form 3115 must be timely filed for the same tax year in which you sell the rental property.

    Comments

    • Get turbo tax premier and enter all of your details. This will take care of your question. If you use a CPA, I would tell you that there is only one person who cares about your taxes. That would be you.

      If you presented your details to 10 CPA's, you might get 10 different answers.

      So, get Turbo Tax and start answering the simply questions that Turbo Tax has and find out the consequences. You can pretend you sold the home last year and produce a "what if" scenario.

      Good luck.

      Alanwms

      by Alanwms on September 28th, 2009

    1 comment | Post one | Permalink

Want to attach an image to your answer? Click here.

Did this answer your question? If not, then ask a new question or create a poll.

More Questions. Additional questions in this category.

You're reading We are selling rental property and have never claimed depreciation. What do we do about this when we file our taxes?

Follow us on Facebook!

Related Ads

Related Questions

Professionally Researched

Answerbag

a Demand Media company