I am guessing TT chose to Carry Forward depreciation instead of taking full depreciation and Carry Forward the net losses of expenses. The program is following the IRS rules on this subject.
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)? Vacation home rules require the separation as they are not the same even though they may look that way.
2. In filling the 4797 while selling, will the carry over depreciation appear as PAL carry over? The non deductible Sch E expenses are added to the basis when selling.
3. Assuming yes to #2, how/where does IRS know that we have carry over depreciation accumulated? From the prior year Sch E forms.
