Client converted rental to second home on 12/31/2008. Used as 2nd home during all of 2009. He has accumulated prior unused decpreciation credits carried forward to 2009. I assume the carried forward depreciation can be claimed for 2009, and subsequent years, eventhough no depreciation was earned in 2009, nor will be earned beyond 2009. All comments appreciated.
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Unused depreciation is not depreciation. It stays in basis.Originally posted by RayT View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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Unused Depreciation
If a rental up to 12/31/08 how can we have unused depreciation.
Are you referring to passive loss carryovers?
Depreciation would have "stopped/ceased" at the conversion date of 12/31/08
SandyComment
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Follow Up
Yes, I'm referring to passive loss carry overs, which is primarily depreciation.Comment
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See if this helps
From TTB 7-10Originally posted by RayT View Post
Former passive activities
. A former passive activity is an activity
that was a passive activity in a previous year but is not a passive
activity in the current year. A prior year unallowed loss may be
deducted up to the amount of the taxpayer’s current year net income
from the activity. Any remaining prior year loss is treated
like any other passive loss.Comment
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