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nexxnessa
Returning Member

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

After adding the rental asset in Turbo Tax, how do I answer the step "Confirm your prior depreciation" step ("Amount of depreciation taken in prior years (not including any section 179 deduction or first year special depreciation allowance deduction) ")? Should the amount entered be $0 (since no depreciation was taken in prior year's returns) or should it be the 481(a) adjustment amount per Form 3115 (accumulated depreciation omitted)?

Tomek
Level 1

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

The best help ever ! Mega-thanks ! Ethereal   Level 2

 

nelsonfn
Level 2

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

@nexxnessa Did you ever get an answer to this? I have the same question.

 
 

After adding the rental asset in Turbo Tax, how do I answer the step "Confirm your prior depreciation" step ("Amount of depreciation taken in prior years (not including any section 179 deduction or first year special depreciation allowance deduction) ")? Should the amount entered be $0 (since no depreciation was taken in prior year's returns) or should it be the 481(a) adjustment amount per Form 3115 (accumulated depreciation omitted)?

MarilynG1
Expert Alumni

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

@nelsonfn When you enter your Rental Property info, based on the Cost, Date you Started Renting, etc. TurboTax will generate an amount for Prior Depreciation based on that (whether you actually claimed it or not).  

 

Don't change that amount or enter $0. 

 

This year's depreciation will be added to your Rental Expenses. 

 

Click this  link for more info on Rental Depreciation

 

 

 

 

 

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JPRIMAS001
Level 2

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

I was unable to get turbotax to correctly complete the section 481 adjustment.  I ended up paying someone to do it.

BSander21
Level 1

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

Hello, @Critter super helpful thank you!  I've done all the calcs, and added the previously unclaimed depreciation as an 'other' expense line item on F8825 (it's a partnership return).  By any chance do you have thoughts on how this would impact the state return (ours is for a Virginia partnership)?  I don't see a state-level equivalent of F3115 but it looks like Ttax simply flows through the new higher Federal rental expense amounts onto the state return.  Could it be that easy?  Thank you!!  

nexxnessa
Returning Member

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

@nelsonfn Not in time for me to file last year. Looks like someone just replied after your message.

7dSEypIc30
New Member

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

I am in a similar situation where I have couple investment properties with missing depreciations.  Following a similar advice I did an amended return for 2019, but later realized that I should be doing form 3115 instead along with my 2020 tax returns.  After some reading (including this forum which was very useful) I am ready to submit 3115 with my 2020 returns (claiming all missing depreciation through and including 2019), however not sure how to handle the amended returns for 2019.  I sent it over a month ago but IRS still does not have any information on this.  I am inclined to just go forward with my 2020 return (including form 3115) .  As I understand there's no way to cancel the amended return once you sent it to IRS, does anyone know how to best proceed?  Thanks all! 

DavidD66
Employee Tax Expert

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

No, you can't cancel your amended return.  During normal times, an amended returns usually takes six to eight weeks to show up in the IRS system.  It's now taking up to a year, or more for amended returns to be processed.   I would go ahead and file 2020 with Form 3115 (remove depreciation for 2019).  I would also explain that you amended 2019 before you realized you could file form 3115.

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7dSEypIc30
New Member

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

Thanks for responding.  I did my amended return with turbo tax online, and after searching around I found that there is an option to cancel it from there.  I canceled yesterday, hoping that's all that's needed for that.  Best,

2yuexue
New Member

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

Extremely help information.  I do have a question though.  The catch up amount didn't carry to Schedule E on the other expense. How did you make that part to work?  Thanks!

7dSEypIc30
New Member

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

You just need to manually enter new line in 'other expenses', can call it something like: 'Catch up depreciation expense, form 3115' 

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