@pashton wrote:
Thought if I did not depreciate it them I would not have to pay taxes on that depreciation once I did sell it, so my depreciation is simple zero.
Nope. The depreciation that you COULD have take lowers your Basis regardless if you take it or not. You will be taxed on the gain due to the depreciation that lowers that Basis. Again, that is even if you did not actually take it. So depreciation is required.
If you filed zero depreciation for 2 or more years, you need a special form to 'catch up' on the depreciation, and you should go to a tax professional for that.
It sounds like the house probably qualifies under an Implied Life Estate. If that is the case, the starting Basis is the Fair Market Value on the date of your dad's death.
Between (1) missed depreciation, (2) a Involuntary Conversion (§1033 Exchange) and (3) a potential Implied Life Estate, you really need to go to a tax professional for this.
