If I've had a residential rental property for the past 7 years but haven't claimed a depreciation expense my returns, how should I handle it? Thanks

[Anonymous_]

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@pk wrote:

this is the form -- .pdf 

https://www.irs.gov/pub/irs-pdf/f3115.pdf

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That is the correct form, but taxpayers preparing the form do not need to have a preparer other than the taxpayer sign it if the form was self-prepared as another poster indicated in this thread.

[pk]

@Anonymous_ , correct  and agreed .  It would be inconceivable  that a taxpayer  would be required the services of "another" except  in case of arguing before a court ( and even there  it is with some provisos. ) 

[Aims173]

Hi,

For a rental property that I missed to claim depreciation expense for past 4 years and paid taxes on net possitive income due to this error  -   Can I claim net passive loss and offset my total taxable income in the year when I file form 3115 and claim 481A negative adjustment on my return? Or will my passive losses be restricted to set off only against future passive income?   

Trying to understand how do I get back the higher taxes that I paid in past years due to not claiming depreciation? 

Thank you

[Anonymous_]

You are correct; you use Form 3115 and a negative 481(a) adjustment on your current return.

Unfortunately, you cannot get back the higher taxes you paid on past returns. 

[Aims173]

Thank you for your quick response.  So Is the 481 a adjustment made on schedule E and hence increase passive loss? Or does that go directly on 1040 as other losses? 

Also if I already filed my current year return, can I amend the return with form 3115 or wait for next year?

[Anonymous_]

See this thread: https://ttlc.intuit.com/community/business-taxes/discussion/where-to-enter-my-section-481-a-adjustme...

[Anonymous_]

Note that you will likely wind up with a higher passive loss for the year and you can file as you see fit.

It is probably just the best approach to file with next year's return (2024).