Rental Recapture not matching depreciation claimed.

[cynicalnewenglander]

Hello, I sold a rental property and the depreciation I claimed while it was rented is a little less than the depreciation claimed over the years. Any idea why and how to figure out where it wasn't claimed where it should have been? My understanding is depreciation recapture due should match exactly depreciation claimed over the years. I'm wondering how to find out where and if I need to do an amendment to make them match. Claimed Depreciation 2024 - $3669 2023 - $3829 2022 - $0 Total Depreciation Claimed - $7498 Total Depreciation Recapture - $8,358.00 "Sale of Business Property"

[DianeW777]

It depends. When the property was placed in service is the key to the correct depreciation that should have been claimed. You can use the 27.5 year chart to manually calculate the correct total amount as well as the amount per year. You can also find this chart in IRS Publication 946 (Table A-6).  

The depreciation expense under tax law is 'allowed or allowable'. Simply put, if you had depreciable property, regardless of if you‌ used the depreciation, it must be recaptured at the time of disposition (sale).

You do have the option of filing Form 3115 (not supported for e-file): At the point of sale, you will recapture any depreciation that was allowed or allowable. 

• You can use the following form to correct the depreciation for your rental property. Take any amount not previously expensed on prior returns, as an expense on the current year tax return as 'Other Expenses'.

Form 3115 Instruction: By including this with the current year tax return, you can complete everything on the 2024 tax return.

• Adopt a change in accounting method: This option allows you to go back as far as you need. Make the adjustment on your current year tax return to expense the missing depreciation.
  • Why am I adopting a change in accounting method? Not claiming depreciation in two or more years indicates that you've chosen an accounting method without depreciation. In this case, you must now elect to change your accounting method to include depreciation.
• This form is available in both TurboTax Online and TurboTax Desktop. TurboTax doesn't help you with this form. And your return must be mailed because this form is not supported through e-file.

This must be completed and filed with the return on time.

You can change to TurboTax Desktop if you choose.

• How to switch from TurboTax Online to TurboTax Desktop?

@cynicalnewenglander

[Edited: 03/10/2025 | 8:24 AM PST]

[AmeliesUncle]

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@cynicalnewenglander wrote:
 2022 - $0 Total Depreciation 

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Was it available for rent in 2022, but you forgot to claim depreciation?

If so, that is where the difference is coming from.  The gain from the depreciation is based on the amount you COULD have claimed.

If that is what is happening, you have the option to amend 2022 to claim the missed depreciation.