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New Member

Rental Deductions Depreciation

Does anyone know why my tax attorney would stop taking depreciation on my Rental house?  In years 2003-2007 she divided the basis by 27.5 yrs. and deducted  for each of those years.  I did have a passive loss each of those years. The next year  2008 she did not take any depreciation from that year on?

5 Replies
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Level 10

Rental Deductions Depreciation

Was it purely rental, or did you also use the home for personal use?

 

Assuming it was 100% rental, it sounds like a mistake.  You should ask the person who prepared your tax returns.  You may need to seek professional help to correct things.

 

As a side note, why were you going to a tax attorney for your tax returns?  Unless you are going to court for tax reasons, you generally don't need a tax attorney.

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Level 3

Rental Deductions Depreciation

And you are just noticing this 12 years after the fact ???  The depreciation should be on the Sch E each and every tax year until it is fully depreciated or taken out of service/sold.  

 

Sounds like an error that was perpetuated every year since then ... did you ask them why ?   If this is an error on their part then they should make the corrections for you gratis. 

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Level 15

Rental Deductions Depreciation

@AmeliesUncle  There are many reasons some taxpayers use a tax attorney.  for example bookies and loan sharks.  A Non-attorney including a CPA can have their client's tax records subpoena but not attornies. 

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Level 10

Rental Deductions Depreciation


@HACKITOFF wrote:

A Non-attorney including a CPA can have their client's tax records subpoena but not attornies. 


Interesting.  I didn't think of that, but that makes sense.

 

I guess the 'dark' side of things like that don't occur to me.   🙂

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Level 15

Rental Deductions Depreciation

In years 2003-2007 she divided the basis by 27.5 yrs. and deducted for each of those years.

Really? That makes me question the credentials of your tax attorney. That is "NOT" the correct way to figure depreciation, by any stretch of the imagination. I suspect you are just assuming that's how your attorney figured the depreciation. Just be aware that most likely, your assumptions are wrong.

The correct way to figure depreciation for residential rental real estate is detailed in IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf using the worksheet on page 36, and the table A-6 on page 72.

The next year 2008 she did not take any depreciation from that year on?

The only valid reason for that, would be if you converted the property back to personal use on or before Jan 1, 2008 and no longer rented the property out from that date up to the present. So did you stop renting the property on or before Jan 1, 2008 and have never, ever, ever rented it out since that date?