I can help with this. But first I need you to understand some things, and I need you to clarify some other things for me so I don't waste your time with information that doesn't apply to your situation.
For starter's, understand that depreciation is not a permanent deduction, and you don't "deduct" the rest of it. Your depreciation on the property just "stops" as of the date of the fire. At some point in time all the depreciation you've already taken on the property will have to be recaptured by you and you will pay taxes on that recaptured depreciation. This "usually" occurs in the year you sell or otherwise dispose of the property. But your situation is not what I would call "usual". We'll get into that later. Now the additional clarifications that are necessary.
- First, was there an insurance payout involved in this? (I expect not. But there could be.)
- YOu say, " Now we rent it out as a parking lot" I need clarification on this. Do you rent the lot on contract to say for example, the business next door that uses it as parking space for their customers? Or do you rent parking spaces on a "per car" basis daily, where you are controlling who enters/leaves the lot?
- Did you pay for demolition, paving, painting parking spaces, etc.?
