- I purchased a 2 units duplex property on 10/2018 and both units were rental until 03/2019
- 1 unit was used from 03/2019-08/2019, the second unit was rented all the time. That unit that I used as primary residence was back rented from 08/2019-10/2020
- in my 2019 return Turbotax determined that the depreciation should be ~$2k
I sold the property on 10/2020
- I didnt know that for the 3 months I owned the duplex I may be eligible to depreciate it so my depreciation for 2018 was 0
- I should also mention that my primary reason to buy this property was to occupy it but it was initially rented to tenants that I couldn't cancel their contract and after a few months that I used it as my primary residence I moved out of that state on late 2019 because my job changed and I got employed in a different state, and my mortgage was FHA.
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Now when Im trying to calculate my capital gains from the sale, my depreciation is being calculated by Turbotax to be around $7k. It asks me if the units were rented through 2020 (which they were 100%) and it calculates that the depreciation of all the years should be ~7k. This generally looks like a problem in Turbotax online that screwed (maybe!) the 2019 or the total depreciation! My general conclusion based on a conversation that I had with a TurboTax CPA was that the Turbotax online software cant recognize the differences between each years' rental vs primary residence and just takes the last entry as a whole and that's why this calculation is being as I described.
I asked a few experts in TurboTax (some were CPAs) and I have different answers each time. Some say I should amend 2019 and 2018, and some say just file based on 2019 file and if IRS requests then amend.
I'm just super confused what I should do. Please help me navigate this.
