Yes, also, the tax law is clear for depreciation. It's basically a 'use it or lose it' scenario. It's not clear why you didn't use the depreciation for all 7 years. However if it was rented or available for rent all of those years, then depreciation is required.
If you did not rent the property all seven years, then you basically placed it in and out of service. In that instance you would need to manually track the actual depreciation during the periods of rental use. The depreciation for AMT would be the same since it uses straight liine.
If the rental property was active all 7 years and for some reason depreciation was not used:
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 rental 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.
- What should I do if I didn’t take depreciation on my rental property?
@Chuck-Nistler
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