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khwilliamson
Returning Member

Paid delayed bill for casualty loss in year after sale of rental residential property

I sold a rental property in late 2021.  After the tenants had moved out, and a buyer was interested, there was a sewer backup which cost about $15K to put back to the condition before the casualty.  There were multiple contractors involved.  One sent their bill to the wrong address, and in all the commotion I didn't notice I hadn't paid it.  It was for $7K.  Just before sending it to collections, they made more of an outreach effort which found me, and I paid it then, May of 2022.  I added the bills I did pay in 2021 to the cost of selling.  I believe the basis was reduced by the cost to restore it, and there was no time to depreciate it significantly differently from the rest of the asset, but I don't really understand this stuff.

 

I think I should just file an amended return before Tomorrow's 3 year deadline for 2021 with that $7K added to the cost of selling.  And a distant relative who is a CPA told me to do that in a 30 second aside at a family reunion.  But I've been unsure, and have procrastinated to the last moment, and am now asking for any advice

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1 Reply

Paid delayed bill for casualty loss in year after sale of rental residential property

Are you sure it's worth it?

 

You're adding $7k to your basis from the 2021 sale and also keeping open a tax year that is almost closed (i.e., time barred due to the statute of limitations). 

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