PatriciaV
Expert Alumni

Investors & landlords

You "amend" your prior year by filing a corrected version of that return. Here's an article explaining the process: How do I amend my federal tax return for a prior year?  You have three years from the date you filed your return or two years after you paid the tax due (whichever is later) to file an amendment, which means you will probably amend your returns for 2019-2021.

 

When you amend the first year, remove the rental asset (not the property, just the asset). Then re-enter using the correct basis. TurboTax will calculate an estimate of accumulated depreciation, which will be incorrect. Because you have reported excess depreciation for this property, you need to enter the amount from the prior year Depreciation Report instead of accepting the calculated amount. 

 

If you keep this asset for the rest of its useful life, you'll actually stop depreciating it in the last few years because you've already taken that depreciation in earlier years.

 

Repeat the amending process for each year (2020-2021), entering the accumulated depreciation on the Depreciation Report from the amended return of the prior year. Then use the amount from 2021 (as amended) on your 2022 return.

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