You are correct, you have no way of writing off the undepreciated cost of the improvements.
You deducted the portion of the cost of the improvements that were applicable to the time you rented the property, for which there is some ambiguity as to whether that was allowable. The rest, or undepreciated, portion of the improvements were then returned to the owner so they are no longer deductible by you since you don't rent the property out anymore.
If you had owned the property you could write off the rest of the cost of the improvements against the sale proceeds when you sold the house. But since you are not the owner, you can't to that.
On a side note, the owner of the property should record the value of the improvements as rent income, but that is not your concern.
@pbmunkey
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