Depreciation is claimed each year the property is a rental. You should have been claiming that each year you were renting it out.
Did you use TurboTax to report the rental on Schedule E?
Whether you claimed it or not, you have to deal with "Depreciation Recapture" when that property is sold.
You must take the original cost, plus improvements (if any) such as a room addition or new HVAC. Subtract the depreciation that was taken OR SHOULD HAVE BEEN TAKEN while it was a rental and that is your adjusted basis.
So, lets twelve years ago you purchased the home for100,000 and you split that as 5,000 for the land and 95,000 for the building. (only the building is depreciated) (You must use the lesser of what you paid to purchase the home or Fair Market at the time it was converted to a rental)
The property was rented for four years, so the depreciation should have been about 13,800 per year, so 55,200 total.
100,000 - 55,200 = 44,800 That would be your adjusted basis
Let's say you sell it for 150,000.
That would result in 55,200 "Depreciation Recapture" taxed as Ordinary Income and 50,000 Capital gain.
(150,000 - 44,800 = 105,200 105,200 - 55,200 = 50,000)
Sale price less adjusted basis = Total Gain Total Gain less Depreciation Recapture = Capital gain
TurboTax will walk you through reporting the sale
Wages & Income
Less Common Income
Sale of Home (gain or loss)
If you want to claim the depreciation, you could go back and amend the previous returns (2021 - 2023) and claim any depreciation for 2024 if it was a rental in 2024 before the sale.
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