We've been renting out a residential property for about a decade now. However, we are just learning now about the ability to take depreciation against that property's value. This was never suggested to us by the TurboTax software annoyingly enough.
If we didn't take any depreciation during this past decade, can we start now? Or are we stuck?
Of course we plan to talk to a professional directly about this but wanted to get some initial insight.
Edit: Ok I did some more searching for previous answers and found similar questions. However, I still am a bit confused.
Do I need to file an amended return for last year to include depreciation last year and include this year's depreciation on this years return? Or do I need to file a Form 3115 before doing anything at all, including filing this year's taxes?
You can not amend prior years. The omission has gone on for too many years. This is a change in accounting methods. It requires filing Form 3115 for the year of change. The missed depreciation is subject to IRC 481 as to when it is included In taxable income
from reg 1.481-1
(2) If a change in method of accounting is voluntary (i.e., initiated by the taxpayer), the entire amount of the adjustments required by section 481(a) is generally taken into account in computing taxable income in the taxable year of the change, regardless of whether the adjustments increase or decrease taxable income. See, however, §§ 1.446-1(e)(3) and 1.481-4 which provide that the Commissioner may prescribe the taxable year or years in which the adjustments are taken into account.
consult a pro