can I report depreciation carryover in a later year

[Carl]

Don't worry about it. Besides, the landscape format reports are only for your records as well as used to track history and a few other things. Neither of the two landscape format ones are sent with any tax return. If one is required to be sent, it's the main one that prints in portrait format. To see what it looks like, see https://www.irs.gov/pub/irs-pdf/f4562.pdf

Generally, it only gets included with a filing if something changes - such as adding or selling an asset or something like that. In the end, if the IRS needs it, they will send you a letter specifically and explicitly requesting you send it. The important thing here is that you *do nothing* until and only if the IRS sends you a letter. It's not a big deal really.

Just understand that if you do get a letter from the IRS, follow the instructions in that letter to *absolute* *perfection* and do not deviate from those instructions one single iota. Otherwise, it just makes things worse.

In most cases, the last human to physically read a mailed tax return is the person who put it in the envelope. The IRS robo-bots remove them from the envelope and run them through a scanner to get them into the system electronically.  Then any issues found by the IRS computers results in a computer generated letter, of which the first human to touch it and read it is the recipient of that letter.

So if you ever get a letter from the IRS for any reason, that's why it's important to follow the directions in that letter "exactly".  Letters from the IRS all have a form number that will be in the upper right or upper left of that letter. That form number starts with the letters "CP" or "LTR" generally followed by 2-5 digits.

For example, check out what a CP105 looks like at https://www.irs.gov/pub/notices/cp105_english.pdf

[toborac]

@Carl @AmeliesUncle 

Thank you for the great answers. Really appreciated! I have peace of mind after reading your detailed comments. This was a great learning experience. Below are the major takeaways through this long thread.

- Rental property depreciation must be reported

- Rental days vs Personal use days

- Prorated split of mortgage interest and property tax between Sch A & Sch E

- Form 4562 for depreciation

- Form 8582 for Loss

[Carl]

I have peace of mind

So many folks have a bit of a misconception about the IRS - though if one doesn't follow instructions that misconception may come true.

When the IRS finds a problem with a tax return they do not automatically assume you are a criminal. It's understood that people make mistakes. So a letter is sent to the tax payer detailing the problem or what the IRS changed on a tax return. Most of the time the IRS letter will say "we already changed it" along with additional refund you may be due, or a bill for additional tax you may owe.

That letter will then outline what actions to take if you disagree with changes made by the IRS and usually provides a deadline by which to respond. If you don't respond by the deadline then as far as the IRS is concerned, you agree with their changes to your tax return and there is *no* recourse after that deadline. This is one reason to keep your mailing address current with the IRS.

If taxes are due, then interest continues to accumulate. Depending on the amount of taxes due the IRS can (and usually will in time) take further action such as pay garnishment, or levying liens on property you own to satisfy the tax debt. Things will only get worse from there.

But a vast majority will work things out with the IRS in an amicable way for the most part. Yet it is true that when it comes to it, the IRS can be worse than the 1930's German Gestapo could ever dream off.

[toborac]

A fun and delightful reading. I like this goodwill thinking in the life. There was one time IRS corrected my return and sent me a check with extra refund, plus interest😀. That was not a big amount but was indeed a happy surprise.

[brown7777]

Just a quick note of thanks to let you know the information in your response (and from others in the thread) proved very helpful to me in April 2021.  Thank you for sharing your knowledge!