Thanks Carl. The stepped up basis did not occur in 2017, so we are in process of fixing that. Although in my mind, Turbo Tax would have calculated the depreciation on the "new asset" with the new basis in the asset summary when you enter it in with 1/2 FMV and 1/2 land etc... The issue would have been that we simply did not take the depreciation that we should have, so shame on us and our loss/government's gain. It's like the rule where the IRS basically tells you that if you don't take depreciation on a rental, they will just assume you did regardless when they tax you on a sale of it in the end. I will have to look into help for the IRS 3115 form, but initially I was prepared to simply take the hit of not taking advantage of the depreciation in the 2018-2020 time frame because we screwed up. Again, our loss for not taking it, but it would be in place for when a future sale takes place on another rental etc... How does one even begin the process of using Turbo Tax with IRS form 3115? Would a CPA or tax specialist even know how to do this with Turbo Tax?
Follow up on the asset summary... so you leave the original asset summary alone - full basis, full depreciation (rental was fully depreciated), full land value etc... and then mark it as "sold" on the sale date or Date of Death of owner? I don't think it let me put the date of death as it was in the past? If I take it "out of service" for personal use, it will still recapture all the depreciation or no? I added a new asset at the 1/2 value and put in service as DoD and then sold as date of sale. It automatically calculates the depreciation that should have been taken such that it takes it out of the basis from what I see. So I'm still confused as to what to do the original "old" asset in the asset summary because it looks like it is taxing twice for a sale, twice. If I just do the sale from the original asset, the tax owed is coming out way less than if I try to split the assets. So I guess I just need to understand first how to handle the original vs new asset in terms of dates and designations of what is happening with the asset in the Turbo Tax software.
Thanks for any further insight you can give!
