rental Property

[Gary]

This has probably been asked many times, but I will ask again.

I have a client that had rental property for a number of years and it was trashed by the renters. He had the house repaired and then tried to sell it. It took two years to sell, but it finally sold in 2008. He prepared his own taxes up until this year. He did not file a schedule E for the the years it was not rented. How do I now handle the sale? Do I need to amend the returns for the years not rented?

[Jesse]

Was the house available to rent or did he take it off of the rental market to try to sell it? If it was not available to rent I don't think you would need to amend as depreciation would not be allowed if not available for rent.

[Gary]

Not on Market

No. He had no intention to rent it again. Do I just do a sale on the 4797 and assume all depreciation that he should have taken during the rental?

[Gretel]

Yes, depreciation allowed or allowable is applicable only for the time he rented the place or it was available for rent.