I have been using TT for years. We have a second home, that gets rental income during summer months. We have had this property for 10+ years. For each of the years, total expenses + depreciation exceeds the income on the property. We notice that TT has been carry forwarding Depreciations (that we could not take). As of now we have accumulated $100k+ carryforward depreciation (shows up on line #18 of TT's Schedule E worksheet) accumulated. I am guessing TT chose to Carry Forward depreciation instead of taking full depreciation and Carry Forward the net losses of expenses.
Now we are selling the property. So a few questions - 1) why did TT chose to carry forward depreciation instead of carry forward losses (or are they same, or difference as far as IRS is concerned)? 2. In filling the 4797 while selling, will the carry over depreciation appear as PAL carry over?, 3. Assuming yes to #2, how/where does IRS know that we have carry over depreciation accumulated?
