A rental property is a business property that produces passive income. If you never took depreciation while it was a rental, you have two options. Eat all the depreciation you failed to take or file a Form 3115 and claim it all now. See another post of mine for some help with the 3115 here. You need to file 3115 with the form or pay a hefty fee to file it separately.
@Meritaten
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