Should I continue the original depreciation schedule on my share of rental property and then start new schedule inherited step up portion; thus two schedules?

[DC]

Each 1/3 owner had a basis of $40,000 ($120K Total).  New appraised value on date of death is $420,000. Each owner already depreciated $30K.  One owner passed away this year.  How is this handled?  Do I do a new calculation and start new?  Do I continue the same depreciation schedule with the original $40K and do another for 50% of the deceased $100K increase?  Where is this handled in TT?  Also, what about improvements that are currently being depreciated, like a new roof?

[view2 · Accepted solution]

A joint tenant on the property, The IRS considered this as a gift of a 1/3 percent interest in the property. Joint tenancy is a form of property ownership that has "rights of survivorship."

Joint tenancy—sometimes called “joint tenancy with right of survivorship  ”is a useful form of ownership for people who want the property to pass to the other owner without probate,

Your depreciation of your original investment is not effected.

You add your 50% of the stepped up value of the 1/3 share of the deceased value on the date of death that was divided between the two remaining owner.

Click add an asset at your renal asset summary screen.

[separate land value ,land is not depreciated]

The accumulated depreciation on the 1/3  percentage of  rental property prior to the decedent's death is irrelevant.[ i.e.,the deceased part]

 Once the property has been inherited, the depreciation schedule would begin based on the new 1/3 fair market value.[each must calculate the correct percentage based on the individual facts.]

[DC]

To clarify --  Continue my current depreciation schedule of my 1/3 interest and then start new depreciation schedule for 50% of the increased value of the building value, as a new asset.  What happens to the capital improvements that I am currently depreciating 1/3 of that are not fully depreciated?  Thanks very much.

[view2]

Non of your share of the assets are effected.

You are still accounting for all of your original assets. You have your part of the roof and:
 then
You add your share of the deceased stepped up value.on DOD.