"Why can't I just delete my previous depreciation schedule effective the date the renovation started (thereby discontinuing the depreciation expense for the renovation period), "
Because all the prior year's depreciation already taken will be lost.
Some people are of the mistaken belief that depreciation is something they get to deduct forever, and once deducted, that's it. That's just not true. At some point in time, all depreciation taken on any asset will have to be recaptured and it's taxed in the year of recapture. Depreciation is recaptured and taxed when one of two things happens in your life.
- You sell or otherwise dispose of the property
- You die.
So until one of those things happens in your situation, you *have* to account for that already taken depreciation. You can't just delete it, with the belief it goes away forever. You can rest assured the IRS will catch it. If they catch it years down the road, the then back taxes, fines, and penalties for having just wiped it out will bite you. Generally in a situation like yours they won't catch it until the year the property is sold or otherwise disposed of. But rest assured they will catch it.
Basically with my above comment, what you're doing is in fact, starting over. But you're accounting for the prior year's depreciation already taken, by adding it to the value of the land. Since land is not depreciable, it gets transferred and added to the un-depreciable value of the land on the new asset. Every penny is accounted for.
If you want, take it to a CPA and they'll tell you just what I've told you. If they're an honest CPA not claiming to "cut corners" to save you money that is. You gotta remember, even if a CPA does your taxes for you, it's you that signs the return stating it's true and correct under penalty of law.
