We are selling a house that has been a rental for the last 10 years. Upon the sale of the home we realized that we incorrectly input our cost basis 10 years ago when it was converted to a rental property. The amount isn't huge, but the cost basis has been underestimated by about 10% and thus the depreciation has been underestimated as well for 10 years. Unfortunately, this error was not caught until now. Am I able to adjust this? If so, how? Someone recommended the following, but is this the correct method or is there a better (or easier) way: To correct the basis you just add an asset to the depreciation schedule and call it "un-depreciated basis."
