I am looking for some guidance on my situation.
I bought a condo in 2016 for $350k as primary residence. In July 2017, I moved out and started renting the condo. For the first year of rental (2017), I took the depreciation. However since 2018, I havent taken any depreciation on the condo.
I wanted to know the process to claim the depreciation for 2018-2025. I found some conflicting information -
1. This discussion states that for cases like mine (rental depreciation taken in first year but not later) I cant file form 3115 if you read the response at end of post. Is this true? - https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/missed-depreciation-o... . I couldnt verify this anywhere on IRS website.
2. I have a second rental which i started renting last year. I am assuming for this property, I can start taking depreciation without worrying about my condo that i started renting out in 2017.
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1. Yes, you will want to file the Form 3115 to report the missed depreciation. Unfortunately, TurboTax does not create this form, but if you have the Depreciation report from the first year you reported the rental you should be able to determine the depreciation that should have been taken, and you can use the same numbers for your entry in TurboTax for this year.
2. The second rental would stand alone so your depreciation would not be affected as long as you are claiming the depreciation on the first rental as well. (If the first property had a loss and the second property had taxable income or vice versa you may have to net the passive activities for your tax return on Schedule E).
1. Yes, you will want to file the Form 3115 to report the missed depreciation. Unfortunately, TurboTax does not create this form, but if you have the Depreciation report from the first year you reported the rental you should be able to determine the depreciation that should have been taken, and you can use the same numbers for your entry in TurboTax for this year.
2. The second rental would stand alone so your depreciation would not be affected as long as you are claiming the depreciation on the first rental as well. (If the first property had a loss and the second property had taxable income or vice versa you may have to net the passive activities for your tax return on Schedule E).
Thank you @MaryK4 for your response.
On 1. I do have my tax return copy to determine the depreciation i took for the year 2017. Thanks for clarifying as the other thread explicitly said file amendments for all years if you took depreciation for first and/or second year of rental.
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