@Christopher Chu wrote:
This was due to the error where I mistakenly entered my own improvement amount of ~$10K (repairs and adding 2 rooms in the basement) before renting the house into the "building" amount ~100K into Turbo-tax.
Question 1:
If I don't do anything, I will loose approximately the following amount of depreciation deduction for 27.5 years (4000-1600) x 27.5 = $66000. Is this correct? In this case, after 27.5 years when I sell the rental, I assume the government only recapture the actual depreciation (1600x27.5). Is this also correct?
Can you clarify and expand on your mistake? I'm just trying to figure out if there is any legal way to use Form 3115 (which would be MUCH better).
Yes, you would lose that much depreciation. But NO, the 'recapture' is on the depreciation that you COULD have taken. That is why it is important to try to correct as much as possible.
I'll respond to your second question after you expand a bit on the mistake (in case you can handle this differently).
On a related note, from 2011-2018, did your rental have losses? If so, were they allowed to be used, or have they been carried forward on Form 8582 (and have they EVER been able to be used)? That could possibly also affect who you proceed with amending.
