topic Re: Rental property purchased 15 years ago, with various percentages of use in Investors & landlords

Rental property purchased 15 years ago, with various percentages of use

megandersen — Thu, 18 Mar 2021 05:15:17 GMT

I bought a townhome in Aug 2005. I lived in it but rented out 3 of the 4 bedrooms until Sept 2010. I considered it a 75% rental from Aug 2005 to Sept 2010. I then converted it to personal use through December of 2011 (15 months). It then become a 100% rental Jan 2012 until I sold it in July 2020. How do I calculate the depreciation percentage/amount now that it has been sold?

Re: Rental property purchased 15 years ago, with various percentages of use

Mike9241 — Thu, 18 Mar 2021 08:02:13 GMT

you need the depreciation taken for rental purposes for each of those 15 years. neither the IRS nor TurboTax have returns going back that far. if you don't have those records, I would recommend consulting with a tax pro.

Re: Rental property purchased 15 years ago, with various percentages of use

megandersen — Fri, 19 Mar 2021 18:35:55 GMT

I have those records. From 2005-2010 it was 85%. 2011 was 0% (all personal use). 2012-2020 was 100 %.

Re: Rental property purchased 15 years ago, with various percentages of use

DianeW777 — Sun, 21 Mar 2021 19:54:11 GMT

You should add the depreciation for all prior years, if the total amount in TurboTax is not correct as calculated for prior years. Once you have that number, you should compare it to the prior depreciation calculated by TurboTax and then make the following adjustment.

When you are in the asset for your rental property (Search rentals > enter > Click on the jump to link and Edit beside your rental):

The screen 'Tell Us More About This Rental Asset'
- Select No, I have not always used this item 100% of the time for business
- Enter the date first used at least part of the time for business and also personal use
- Enter the date you stated using it for business
- Enter the percentage of business use for 2020 (100%)
The screen 'Confirm Your Prior Depreciation' will allow you to enter the full amount of prior year depreciation.
- See the images below.

If you have more than one asset for this rental property and if other assets were also part personal and part business you must complete this information for each of those assets. Once complete TurboTax will know how to enter the appropriate information on your tax return.

Sales price allocation if there is more than just house and land.

Use the original cost of each asset listed on depreciation (all belongs to house B now) add those together then divide each one by the combined total to find the percentage of the cost for each asset. Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset.

Example: Original Cost (of each asset on your depreciation schedule)

$10,000 Land = 13.33%

$50,000 House = 66.67%

$15,000 Improvements = 20%

$75,000 Total = 100%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.