Amend a depreciation

[slinkblot]

Is it possible to amend the depreciation for a previous year on a rental property?

[SabrinaD2]

Yes, it is possible to amend the depreciation for a previous year on a rental property. There are two main methods to correct depreciation errors:

Method #1 File an Amended Return:

• This method works if you didn't deduct depreciation on your rental assets for one year. You can go back and amend the return to reflect the missed depreciation. 

Method #2 Adopt a Change in Accounting Method:

• This option allows you to go back as far as you need. You will need to file Form 3115, Application for Change in Accounting Method, to correct the depreciation. This method is used if you didn't claim depreciation for two or more years or if you need to correct the depreciation method used

Here’s how to handle this in TurboTax:

1. Open TurboTax Desktop and sign in to your account.
2. Navigate to the "Federal" section.
3. Go to the magnifying glass at the top right of the screen.
4. Type "Form 3115" in the search bar.
5. Click the jump link that appears.
6. Follow the prompts to complete Form 3115.

TurboTax will guide you through the process to ensure your depreciation is correctly amended

For more detailed instructions, you can refer to the TurboTax support page

[slinkblot]

Is it allowed to REMOVE a new improvement in it's second year of depreciation?  It was added on my 2023 return.

[DianeW777]

It's not clear why you would want to remove it. IRS Tax Law: Depreciation is allowed or allowable which means you will recapture it when sold even if you didn't use it (use it or lose it). 

Please clarify if you need further assistance.

[slinkblot]

I'm already negative ($$thousands) and it will take years to show a profit for this rental.  I'm planning to move in to the property in the next couple of years.  If I don't take the improvement write off and depreciate it over time until I sell to "recapture", I can write it off when I sell it down the road.  Am I not correct in this?

[RobertB4444]

You can decide not to enter the depreciation on your tax return.  But when you sell it you have to recapture the depreciation whether you took it or not.  So it is better to take it than not take it.

@slinkblot