Hello: I sold my rental house in Feb. 2021 and started to do a "Estimated 2021 tax return" so I can estimate my 2021 quarterly payments to the Federal and State government. In working through the various asset worksheets, I noticed that I have about 5 of the assets (dishwasher, driveway, porch, etc) that were fully depreciated over their asset life. I had owned the rental house for 38 years and had to replace several items when they wore out or needed replacing. The depreciation and amortization report (form 4562) still shows them as an asset, even though they no longer on the property. In hindsight, I should have disposed them in the year that they were replaced.
My question, is as follows: Should I answer that I disposed of the these assets in my tax year 2020, since I never did, or just wait until tax year 2021 and dispose of all the assets including the ones that still have remaining depreciation on them. From a tax point, I don't think it really matters, since I had some of these assets on the worksheet showing that they were totally depreciated years ago and nothing is being further depreciated. However, because I never disposed of the asset, the depreciation report doesn't have a code "S" for sold on it. Just wondering, what would you do. Close out these assets in 2020 or next year?
