Does form 4562 have to be filed ever year that I own the rental property?

[tonybeo]

I have a rental property that was put in service in 2007 and every year, the expense for depreciation was taken on schedule E.  Some of the years that my taxes were done by CPA's the 4562 form was included in the return and other years it was not.  The only depreciation that was taken was for the rental property (i.e. there were no other business assets that were depreciated).  Why would it have been included some years and not others?  Is it not required to be filed every year?

Also, if it was not included and should have been, will that cause a problem later when the property is sold and depreciation is recaptured?  And how would I fix this with the IRS records if its been longer than 3 years and the older returns cannot be amended? 

One other related question is if I can elect to not take the depreciation expense on the rental in certain future years if I end up having tax credits that can wipe out the tax that would be owed on the amount of the depreciation that I would not be taking.  If I don't take the depreciation expense on some years, does that reduce the amount of depreciation recapture I will have to pay when the property is later sold?

Thanks.  

[Vanessa A · Accepted solution]

Yes, it should be filed every year that you claim depreciation.  

At this point there is not a lot you can do or really need to do.  Amending your returns to include the form would not change anything IF the depreciation was still taken.  From here on out, just be sure that the form is filed with your return.  If the depreciation was not taken, you can go back and amend for those 3 years, but prior to that, there is nothing you can really do to "make it better"

Depreciation is not optional. Even if you do not take depreciation, the IRS assumes you took it when you sell the property.  Whether you took it or not, you will need to claim depreciation recapture when you sell based on what you COULD have taken not what you actually took.