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Investors & landlords
Sorry, I misread your original post and though you had a gain. I’ve deleted my answer.
With closing costs, you have a loss. You must recapture the depreciation whether you claimed it or not. What I'm not sure of is whether you can reduce that recapture by a prorated portion of the capital loss.
You now say “I dropped the ball by not claiming depreciation over the last 8 years.” But earlier you said you starting renting it in 2018, which would only indicate 2 to 3 years of deprecation. You don’t depreciate for the time it was your residence.
I’m not an accountant and am not familiar with the rules for form 3115. But, my gut feeling is that you can amend, to claim deprecation, going back 3 years, without that form.
January 12, 2021
7:26 AM