You may want to consider filing Form 3115. The 3115 would allow you take the depreciation you didn't take before in the current year. It's not the easiest form to complete - you might want to seek some help with it. Also, I recommend you use TurboTax desktop so you can access the Forms mode to make sure you get your property set up and depreciation calculating properly. Add the Condo as an asset in 2017, even though it has been sold. This will give you all prior depreciation as well as calculate the correct amount for this year of sale.
You would need to allocate the correction amount not taken for deprecation to your rental property and you will include the adjusting entries as a miscellaneous expense entry (titled sometime like "Form 3115 adjustment" so that the total depreciation for the year (the current year's deprecation plus the Form 3115 adjustment amount) equal the total correct amount of deprecation that should have been taken as of Dec 31, 2017.
In order to file a Form 3115 in TurboTax program, you would need a TurboTax desktop version to complete the entries. You cannot use the online version, unfortunately. If you are currently using the online edition, please follow the instructions below in TurboTax online edition to switch to the desktop:
1. After sign into your account, select Take me to my return
2. At the right upper corner, in the search box, type in 3115 and Enter
3. Select Jump to Form 3115
4. On the screen, Change in Accounting Method, select CD/Download version of TurboTax to continue
5. Once you are in the CD/Download version, use Forms View to enter Form 3115.
- At the right upper corner, select Forms
- Under Forms mode, at the left upper corner, select Open Form, type in 3115 to open form to enter information
An amendment can be completed but only back as far as 2014 (statute of limitations expires April 17, 2018). The tax years 2015 and 2016 do not expire right away.
