Sale of unrented rental

[tocguy]

Rental Property became vacant at end of previous year. Deciding to simply be "DONE" with managing the property any longer a lengthy refurb was initiated and the property was not rented nor available for rent during any part of the current year.

The TT interview directs us to "Sales of Business or Rental Property" when the rental property is not rented for at least 1 day during the tax year in which the property was sold. Here the available data entry fields are much abbreviated when compared with Schedule E. The issue for which I am seeking assistance is; What is the correct accounting for current year depreciation.

If not rented in the current year is depreciation still applicable? Why or Why Not?

My opinion is that because the property was not available for rent due to refurbishment in preparation for sale that the depreciation amount for the current year is not allowed; zero. It follows then that the amount to enter into the "Depreciation Taken on This Property" field is the Accumulated Depreciation for all prior years that the property was utilized as a business asset (aka rental property). Yay/Nay?

Plz advise... Thx

[M-MTax · Accepted solution]

Sounds like you took the rental out of service for the whole year so there is no depreciation allowed.