How to claim catch up depreciation on a property that has never been depreciated since purchase?

[ray500]

I purchased a rental property back in 2003 which was vacant until Oct 2012 and has been rented out since that year.  I have never claimed depreciation on this property and need to know how to claim all previous depreciation from as far back as possible. I don't think Turbo Tax Home & Business is asking me the right questions through the interview to do this right because it is assuming I have claimed depreciation previously.  

[MinhT]

You cannot claim catch-up depreciation on your 2018 tax return.

If you have not depreciated your rental home in previous years, you'll need to amend your previous years' returns to claim it. You can file amended returns for 2015, 2016 and 2017. Earlier years are now closed for amendments. Please note that you only have until April 15, 2019 to amend your 2015 tax return.

It is important to amend for these three years, because when you sell the property, you'll have to recapture all allowable depreciation, even if you did not actually deduct them.

One other option for you is to file Form 3115 - Application for change in Accounting Method. This option would allow you to claim depreciation for all the years you have missed. Filing form 3115 is a delicate process and I would advise to hire a local tax professional to do it for you.

Please see the following TurboTax FAQ for instructions on how to amend your tax return in TurboTax.

https://ttlc.intuit.com/replies/3288565

[ray500]

Instead of going back to amend, If I start depreciation now in 2018, will the program make up the previous unclaimed depreciation in this and future years?

[MinhT]

You should certainly start depreciating in 2018. But past depreciation will never be caught up unless you used one of the two methods above.

[ray500]

I don't have have access to previous years turbo tax files and software.  I only have paper/PDF copies of the returns. How do I go about amending in such case?

[MinhT]

Please follow the instructions in the TurboTax FAQ on how to amend in the main answer.

[ray500]

If I claim depreciation in my 2018 return and put in 0 for depreciation that was claimed for prior years and amend prior years after filing 2018, would that mean I will have to amend 2018 again?  In other words, do  I need to make the amendments before I file my 2018 return?

[MinhT]

No, assuming you will amend 2015 though 2017, calculate the depreciation for these 3 years and enter it as prior depreciation on your 2018 return.

[ray500]

So I filled in purchase of price of the property ($80,000) and date of purchase (Sep 2003) in Turbotax and left previous years claimed depreciation blank since I never claimed depreciation on this property before.  Turbotax is deducting the full $80,000 depreciation as an expense for 2018 and reducing my net income by that amount.  Is this correct?  I understand that I have not claimed depreciation since 2003 but find it odd that full $80,000 is being deducted in 1 year.  Please advise.

[MinhT]

This is not correct. Revisit your entry of the house as an asset. Residential rental property is depreciated over 27.5 years.

[Walmart08]

Instead of amending past years, can I start in 2019 depreciating property I have owned for years and never depreciated?

[JulieS]

No, you can't just start with 2019, you need to either amend each the property has been a rental or file a Form 3115 to claim the depreciation that you didn't take. 

Refer to this post for more information.

[AmeliesUncle]

Unless last year was the only incorrect year, you are NOT allowed to amend.  You MUST file Form 3115 with your current year tax return to correct the situation.  Please go to a tax professional for that.

[Ethereal]

I've completed my 3115 and filed it, and will attach to my return also for this year. What I'm missing though is how do I account for the missed depreciation on my current tax return?

[Critter]

You will make an entry on the Sch E in the other expenses area ... call it form 3115 and enter the amount of catch up depreciation. 

Then you must also enter the asset as if it had been depreciated all those years in the asset section so the current year depreciation is calculated.