You should add the cost of your capital improvements now, making sure to put the correct date placed in service. That date would be a prior year. The depreciation will calculate based on the correct date and provide you with a depreciation amount for the current year.
The IRS law is clear, which eliminates the choice on our part. Under
the tax law, depreciation is considered allowed or allowable meaning that
whether or not you used the deduction in prior years, it will offset your cost
basis to determine gain.
You can amend the open returns to take advantage of the depreciation deduction for each of those years. Currently, amended returns can be completed for 2014 (if completed by April 15, 2018), 2015, and 2016, to accurately
reflect rental income and expense if this activity was taking place in earlier
years.
When you sell the property you will reduce the cost basis by all depreciation that would have been allowed if you had listed it on the return from the beginning.
- To record the capital improvement asset you can follow these steps in TurboTax online or desktop.
-
Select Income & Expenses > scroll to Rentals, Royalties, and Farm
-
Continue to the screen to edit your rental property
-
Select "none" on the "Situations" screen (unless you believe something does apply)
-
Select Assets/Depreciation to enter your capital improvement.
- Click the images attached to enlarge and view for assistance.
Instruction to amend prior year returns is included below. Do nothing until you have read all the information so you don't loose the original return figures.
https://ttlc.intuit.com/replies/3288565
