My Schedule E worksheet, line 18.c , shows depreciation carryover of $1033 (column (a)). But this amount is reported in column (d) instead of (c). I don't know why.

[Anonymous_]

Is this a vacation rental (i.e., has personal use)?

[thluong85]

Hi, this was my primary residence. I turned it to long term rental since 2020 (100% used for rental since then). When I first added the house, I put in the date when it was placed into service and % used for business. I thought during that year I used the house for personal use prior to using it for rental so the % for business use is equal to months of renting/12 months. Was it correct ? 

[DoninGA]

No, that was not correct.  The question refers to using the property after it was placed in service as rental for personal use.  If you did NOT use the property for personal used after it was placed in service as a rental you should have indicated 100% for business use.

[thluong85]

So i need to file an amend for 2020 & 2021 ?  Thank you

[Carl]

So i need to file an amend for 2020 & 2021 ?

Yes. But understand a few things here.

It's important that you amend the oldest return first, and work forward chronologically.

When you amend a return, you can not import from the prior year tax return. Now amending the 2020 return won't be an issue since that was your first year. But when you amend the 2021 tax return "YOU" will have to manually change such things as the "prior years depr" amount, since it's not possible to import the corrected amount from the amended 2020 tax return. Just be aware of that. Otherwise, you'll just make things worse down the road.

[thluong85]

Thanks Carl. I got that. Can i send all the amended returns to IRS at once or it is better to send out the oldest first, then wait for a few weeks before sending out the next one ? Thank you

[Carl]

You must mail each amended return in it's own separate envelope. Since the IRS is still waaaaay behind on processing mailed returns (both normal and amended) due to their shutdown during the pandemic, I would mail them about a week apart.  But that's me.  A few points to cover here.

1. Print out your returns as originally filed and accepted by the IRS, "before" you start the amending process. When printing, elect to print everything; not just the "forms for your records" or "forms required for filing". Print everything. That way, you get all the worksheets and calculation forms. They'll save your butt big time, if audited, or if the IRS has questions on your amended return.

2. When you mail each amended return, mail it "return receipt required" (not "requested")  so you have proof of delivery.

3. When you start your 2022 return, which I assume will be after you amend the prior year's return, make sure you import your data from the "amended" 2021 return, and not the originally e-filed return.

When e-filing your 2022 return, if it gets rejected because of an incorrect AGI, it's probably because your AGI changed when you amended, and the IRS has not yet processed the amended return. In that case, just use the AGI from the originally filed, accepted and processed 2021 tax return. (Hence, one of many possible reasons to print the prior returns before you amend them.)