I purchased a primary residence in 1988 and paid $112,500. There were substantial repairs and remodeling done while living there, but I did not keep track of them. I converted it to a rental property in April 2000. At the time I entered the purchase price of $112,500 and allocated 12% ($13,500) to the land. I have used TT throughout the entire rental process. I sold the property in April 2021 for $442,000. I have now realized that I should have entered the FMV of the property when I started renting it. I went back to the property appraiser's records and found the value for the year 2000 to be $262,020. My thought process was this would be legit with the IRS since I didn't know how much I spent on remodeling/repairs. I allocated 12% of that amount for the land. When I researched on here how to enter the corrected cost basis an expert replied to this question and indicated to enter the adjusted cost basis and leave the prior depreciation blank and TT would calculate what should have been claimed. (I realize this is a loss to me since I didn't take it over the years.) When I did that TT shows a depreciation of $9,982 on Schedule E (along with my other expenses). Prior to making the changes I made a note of the depreciation for each prior year which was $3,318. An additional note was made, prior to changing the cost basis, of the prior depreciation on form 4562 which was $77,430. After making the changes form 4562 (D&A Report) shows only the $9,982. When I entered the sales information (and split out the improvements and land) TT only shows the $9,982 for the depreciation being added back in (form 4797 part III). Does the rest of the depreciation not apply? If it does, how do I correct it? Thank you!
