3115

[ryanroy]

i rented out a property from 2011-2018, claimed depreciation from 2011-2013 (turbo tax failed to carry over the a rental depreciation for 2014) so there is unclaimed depreciation from 2014-2018.  I converted  the property to personal use in 2019-2022 and not claim depreciation.  I am also converting the property back to rental this 2023, I am now filing a 3115 for missed depreciation of 2014-2018. How do i calculate all the depreciations that i missed, shall i also include the depreciation while on personal use to  be included as years of useful life? What total adjustments shall i report in 3115? total years of rented depreciation? or include both accumulated depreciation from renting and personal use? . my situation is quite complicated, and doing a lot of research. Need advice please..

[DianeW777]

Yes, include depreciation only for the rental period that was missed (2014-2018). The chart used to calculate the depreciation is placed here for you and can also be found in Publication 946. Do not use any depreciation during the personal use period.

• Use your original cost basis you had on the rental when it was in service from 2011-2018.

If there were any capital improvements made at any time, and added as a depreciable asset during the prior rental period include a calculation for those as well.

Once you have the total amount and completed Form 3115, this full amount will be listed as an expense on your rental activity as 'Other or Miscellaneous' expense on your current year rental.

For the 2023 period when the it was converted back to a rental, enter the assets exactly as they were previously and if there were any capital improvements during the personal use period add them as a separate asset in 2023.

                                         

[AmeliesUncle · Accepted solution]

Form 3115 does not apply to your situation.  You properly claimed depreciation from 2011-2013, so there is no accounting method to change.

The only way to correct anything is to amend, but because the Statute of Limitations for a refund is over, amending would not do anything UNLESS there were losses that were not able to be used (and therefore still exist as Passive Loss Carryovers).