@Opus 17 wrote:
The gain includes depreciation recapture based on depreciation he claimed or could have claimed, even if he didn't claim it. A 2025 return can be prepared based on the known facts without fixing prior mistakes. There may be other very good and important reasons to file the correct prior tax returns.
The problem is (a) a 3115 would need to be filed to make an adjustment for the depreciation that was not claimed on returns since no returns were filed, (b) your numbers are likely way off because there might have been suspended passive losses and/or the value of land was included in the depreciable basis, and (c) we actually don't know what type of property this happens to be (residential, nonresidential, vacant land).
Again, @user17684044706 could not simply file prior returns to claim the foregone depreciation; a 3115 would need to be filed and that's not really a DIY project.
Lastly, there are just too many facts missing to make any kind of assessment other than recommending a consultation with a tax professional.
