1 - Could we just add the 2010 improvements cost to the 2019 'Business Income and Expenses'/'Sales of Business or Rental Property'/'Cost of Property (or Tax Basis) Plus Expenses of Sale' number ? Btw, the house was not a rental when the 2010 improvements were made, but unfortunately we didnt add to the cost basis.
No, you can not. If the improvements were done in 2016 or after, you will have to amend the 2016 tax return to add the property improvment in the Assets/Depreciation seciton and start depreciating it. Then you'll need to amend every single tax return for each year (in year order) after that to show the depreciation you took on that aset each tax year after it was placed in service. This is a *LOT* of manual work on your part.
If the improvements were done prior to 2017, then amending is not an option for you. IRS Form 3115 will have to included with your 2019 tax return, in order to correctly account for the depreciation you did not take on those property improvement assets.
The 3115 is *NOT* simple by any stretch of the imagination and requires professional help. That would mean there's no need for you to even be using TurboTax for your 2019 tax return.
2 - Would we have the same problem for a future sale of our primary residence home with major improvements done in 2008 & 2012 ?
Yes. Definitely. However, that can be taken care of on the same 3115 that I assume you will be filing with the 2019 return anyway.
Just make sure you get a printout from the paid tax preparer you hire to handle this, so you will have that printout for TurboTax 2020 next year. If you get the professional help required for your 2019 tax return, then you will definitely need the printout to enter everything in your 2020 return next year. You flat out will not be able to import from 2019 when you start your 2020 tax return next year, as the imported information will be wrong since it won't be the same data as filed by your hired tax professional this year.
3 - Couldnt figure out how to delete (for start over) the entry at 'Sale of Business Property' 2019 entry at the 'Business Income and Expenses' list, so went to 'Schedule D' and deleted. That seemed to work, but is that the only way to do 'delete' that entry after all has been entered and saved.
The sale of rental property is not reported in the "sale of business property" section unless unusual and uncommon circumstances apply. In your case, you have an uncommon circumstance of not having taken depreciation as required by law. So I would suggest you not worry about deleting anything in the TurboTax program for 2019 and just abandon it for this year. You really *need* professional help and you need it yesterday if not sooner. The longer you wait to fix this, the more it will cost you in the form of back taxes, interest and penalties. It's gonna make the cost of professional help seem like a pittance in comparison.
So "please" get professional help for dealing with this on your 2019 tax return yesterday, if not sooner.
