How do I adjust a rental property's depreciable basis after marrying the other co-owner?

In 2017 my fiance and I acquired a rental property. We married in 2018.

We split income and expenses 50/50 in 2017 and allocated 50% of the value on each of our returns.

Filing a join return in 2018, the basis should now be doubled combining both of our shares.

Do I just edit the Schedule E worksheet updating the total and land value?
Should "prior depreciation" be updated to reflect the total claimed by both of us?
Does the same apply to amortized refinance expenses?

571

1 Best answer

Level 15

Jun 6, 2019 12:15:12 AM

You are correct in that the basis should now be basically doubled.

Do I just edit the Schedule E worksheet updating the total and land value? --You can adjust it here or in the step by step in the Asset/Depreciation interview section, whatever you are most comfortable doing.
Should "prior depreciation" be updated to reflect the total claimed by both of us?-- Yes, the prior depreciation taken on other return for prior years needs to added to your prior depreciation taken.
Does the same apply to amortized refinance expenses?--Yes, same guidelines apply to this also.

Level 15

Jun 6, 2019 12:15:12 AM

You are correct in that the basis should now be basically doubled.

Do I just edit the Schedule E worksheet updating the total and land value? --You can adjust it here or in the step by step in the Asset/Depreciation interview section, whatever you are most comfortable doing.
Should "prior depreciation" be updated to reflect the total claimed by both of us?-- Yes, the prior depreciation taken on other return for prior years needs to added to your prior depreciation taken.
Does the same apply to amortized refinance expenses?--Yes, same guidelines apply to this also.

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How do I adjust a rental property's depreciable basis after marrying the other co-owner?