I have a client that has sold a rental property owned since 2009. Depreciation was not taken every year they owned it. Should I consider taking all the depreciation in coming up with the cost of the property even though most was not taken on their returns each year?
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"allowed or allowable" means what its says. Unless maybe there was a valid reason for not taking depreciation in any of those years (property temporarily out of service, etc).
There's also the Form 3115 correction method, if applicable.
Others on this forum are much more knowledgeable about it - I've seen them post explanations.Last edited by JohnH; 03-21-2018, 11:48 AM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
As John pointed out, the depreciation that they could have taken lowers the Basis, regardless if it was actually taken or not.
Which years was depreciation not taken? I especially want to know if it was taken in 2015 and 2016 (I'm assuming you filing the 2017 tax return).Comment
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What is the date of sale?Believe nothing you have not personally researched and verified.Comment
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It depends why they did not take depreciation. Depreciation is not allowed or allowable if the property was not available for rent for certain years.Comment
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