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Level 3

rental house depreciation recapture

I sold our two rental house in 2017, and didn't claim the depreciation in the previous years. I know it should recapture when I  sold them, turbo tax asks the amount taken in prior years, do I enter 0? or enter amount I should have taken? thanks.

2 Replies
Level 4

rental house depreciation recapture

You file an amended return for 2017 on form 1040X, pay the tax and penalty, then prepare 2018 taxes as normal.

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Employee Tax Expert

rental house depreciation recapture

You would enter the amount you should have taken.  I also suggest you file Form 3115: Application for Change in Accounting Method to try to recoup the past depreciation not taken.  Please read more about it at this link.