Rental Depreciation question

[frankie123]

We have a situation where a client rented a trailer for 3 years then stopped the rental activity no one lived in it. Now they are renting it out again. It had been depreciated for 15 years. My question is do you just start back up taking the 3 years off and depreciate for 12 years as well as record the amount of depreciate already taken on the form. (Ex: Trailer value $16,910 in 2014 was taken out of service depreciation taken $4,549). Hope this makes sense to someone out there. Seems like I had this same thing 25 years or so ago but things have changed a lot plus I really don't remember how I handled it. Thank

[ATSMAN]

Start with the lower of tax basis or cost.

[TaxGuyBill]

I think ATSMAN meant you use the lower of (1) Adjusted Basis (usually cost, plus improvements, minus previous depreciation) or (2) Fair Market Value at new conversion to rental property.

You need to restart the 27.5 years using that amount. You will need to keep track of the depreciation for both the previous rental period and the new rental period, as all of that will be factored in when it is sold.

Your numbers are a bit weird too. Is the original cost of the trailer $16,910 and only $4549 was claimed for 15 years of depreciation? Something seems wrong with that.


However, your situation seems a bit unusual that nobody lived in the home for three years. Not even personal use?