Yes, I did know about the 3 years. The two returns I have done for 2005 and 2006 they had refunds both years due to EIC so I assume there would have been refunds in 2003 and 2004 also if they had filed.
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two things come to mind
First: if they hadn't filed returns, and no substitute for returns have been done by the IRS, you are still able to file 2003 and 2004, since the statute of limitations starts running once the return is filed, which they haven't been.
As for the depreciation, the code is written as "Depreciation allowed or allowable" for recapture purposes, which means what was taken or should have been taken. So, even if 2003 and 2004 can't be filed for some reason, the basis of the property still needs to be reduced by the amount of depreciation that should have been claimed in those years. TTB page 6-13 goes into some detail on this. Hope this helps!
ATG"Congress has spoken to this issue through its audible silence."
Anyone ever notice they beat the daylights out of the definition of a child, but they don't spend much time at all defining "parent"? -
Of course, if the area did not qualify as a home office in 2003 & 2004, but did qualify in 2005 forward, then the "allowed or allowable" might not be an issue. There are lots of things which can disqualify a home office..."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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]Of course, if the area did not qualify as a home office in 2003 & 2004, but did qualify in 2005 forward, then the "allowed or allowable" might not be an issue.
The home would have qualified for 2003 and 2004 if they had filed returns. I always had the understanding that you only had 3 years from the time a return was due to file it.Comment
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There is a 3-year statute of limitations of claims for refund as well as the assesment of additional tax by the IRS, but that 3 year statute begins with the date the return is filed, so until the return is filed, the statute doesn's start. I am currently filing returns back to 2000 for one client."Congress has spoken to this issue through its audible silence."
Anyone ever notice they beat the daylights out of the definition of a child, but they don't spend much time at all defining "parent"?Comment
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You have 3 years to file and claim a refund. Beyod 3 years, the refund is barred by the Statue of Limitations. But if the taxpayer owes, IRS will accept the return (actually, they require it), no matter how much time has elapsed. There is no SOL on unfiled returns when tax is due."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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