I purchased a property in 2004 for 320k and turned it into a rental property in 2010. When I established cost basis for depreciation in error I used the purchase price as basis instead of FMV which was around 300k (I will get that determined and can use my assessment for the asset/land % split). I sold it in 2018 for $250k less expenses. How do I correct the cost basis? From research I do not use form 3115 to do this as it is an error, not a change in method. In the rental property section TT says not to change the cost basis carried forward from 2017.
Also I am a Colorado resident and the property is in NY state. I have to file showing the sale to NY and be taxed there if there is any gain. So if there is a capital gain to be paid Federally and to NY, do I have to also pay capital gain to Colorado as well ? which seems to be doing it twice state wise.
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