The depreciation can be captured and used in your current year tax return using Form 3115 which must be filed with your 2024 tax return. Follow the instructions in the link below.
Next, for the prior depreciation you have not used. At the point of sale, you will recapture any depreciation that was allowed or allowable.
- You can use the following form to correct the depreciation for your property. Take any amount not previously expensed on prior returns, as an expense on the current year tax return as 'Other Expenses'.
Form 3115 Instruction: By including this with the current year tax return, you can complete everything on the 2024 tax return.
- Adopt a change in accounting method: This option allows you to go back as far as you need. Make the adjustment on your current year tax return to expense the missing depreciation.
- Why am I adopting a change in accounting method? Not claiming depreciation in two or more years indicates that you've chosen an accounting method without depreciation. In this case, you must now elect to change your accounting method to include depreciation.
- This form is available in both TurboTax Online and TurboTax Desktop. TurboTax doesn't help you with this form. And your return must be mailed because this form is not supported through e-file.
Your property in a foreign country is depreciated over a 30-year or 40-year period, depending on when it was first placed in service for rental use. Instead of the 27.5 year for US residential properties the period is different.
- Prior to 2018, depreciation of foreign residential property was limited to 40-year period.
- 2018 and Future: New assets placed in service now get the lower 30 year period.
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