I've owned a condo vacation home for several years with a mixture of both personal and short term rental use. Rental usage has always been greater than personal use but the percentage varies year to year. TT always calculates depreciation for original cost plus various upgrades (flooring, kitchen & bath remodels). But depreciation has NEVER shown up on my Schedule E. Prorated expenses always exceed income but they are understandably capped at my rental income in a given year. Depreciation does show up on the Schedule E worksheet under the 'Vacation Home Loss Limitation' section. But, depreciation has never been used to offset income on Schedule E. Also, despite the cap on expenses, TT never shows any loss carry over on any filed forms or worksheets.
I am selling the condo this year and want to know how to handle depreciation. While TT calculates it and shows accumulated depreciation carry over in the worksheets, it has NEVER been applied to actual tax return in any manner.
Since no depreciation has ever been applied, and it's not included in a loss carry over to be applied when I sell, when I report the sale, do I still need to adjust cost basis for the accumulated carry over depreciation?
