Real estate depreciation reporting

Forum|Forum|2 years ago
January 14, 2024
2 replies
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I bought a condo in 2018 and lived in 18 months. Then I moved to another house and rented my condo from 2021. I never claimed any depreciation for my condo and simply reporting rent - (mortgage interest+taxes+repair expenses). How do I start reporting my depreciation? If I don't report depreciation, Can I offset while selling the property? Can you shed some light here. Thank you!

Not A Product Question

PercyPenguin

Level 2

You need to file Form 3115. This allows you to report in 2023 all the missed depreciation.

Get a tax pro to do it for you (it's an 8 page form of various questions).

The IRS doesn't care whether you claimed the depreciation or not (when you come to sell), they will presume you claimed it.

Correct it with Form 3115 in 2023.

Nat007Author

Level 3

I am using turbotax for 7 years and it is including schedule e and why TT is not forcing me to check this form?

just curious if the purchase price of the condo is is 150K, (including 30K for the land); how much I am loosing per year? Can I just start this year? Thank you!

PercyPenguin

Level 2

When you added the Schedule E, you should have added the rental property as an asset.

You are not alone, many people forget/ miss adding the property as an asset.

Depreciation per year is $4364 ($120,000 over 27.5 years).

You can just add the asset this year but you'll still need the Form 3115 to claimed the missed depreciation from 2022 and part of 2021.

They can do it in Full Service with TurboTax (Select Do My Taxes for Me). It would be well worth the expense of getting an expert to file it for you. They will make sure it is correct and will claim the missed depreciation on 2023.