In 2010, I financed and built an aircraft hangar on land leased from the county airport. Turbo Tax NEVER asked any questions about owned vs leased land, so I have been using schedule E for income/expense, P/L, and 39-year depreciation. I have had to use either the personal % and/or Vacation Home Use on the sched E worksheet to account for my own use of the property (a huge mess). It also involved the Passive loss limitations and vacation home carryovers. I have owned and sold some rental houses over the past few years, so it all seemed to fit.
I just realized that the city has been taxing the hangar as “Personal Property” every year instead of real estate taxes. That led me to digging and it seems that I should have been using Sched C for personal property instead of E for real estate all of these years. Can I just change to Sched C for 2022, or are there a whole lot of gymnastics to go through like amended returns and different depreciation to clean it up?
