Sale of Rental Property HELL

[Anonymous_]

You cannot amend if you used an impermissible method of accounting for two or more tax years. 

In that case, you can only file Form 3115.

See https://www.irs.gov/irb/2018-22_IRB#RP-2018-31

[Carl]

what about any depreciation that I didn't take for 10 years?

You have two choices here.

1) Do nothing, and that cost just flat out does not get added and can not be added to your cost basis. Period.

2) Since you never depreciated the asset, and it's been more than 2 years, amending is not an option. You have to file IRS Form 3115 for the ten years of depreciation you did not take.

Now while the form 3115 is included in the TTX program, it's not simple by any stretch. Unless you're well versed it's highly suggested you seek professional help for that.  Now for me personally, I'm not going to bother with the expense of pro help for a mere $5K asset on a sale that made me over $100K in profit. I'll just overlook that cost entirely "as if" it never occurred.