Hello, I own a rental property and am married filing jointly. We used depreciation on joint returns. But we divorced. this rental property has been sold to me to my ex. What basis of this rental property should i use for depreciation? (use preious basis, or use the new purchase price to calculate the basis)
Would you clarify this? You said you are filing jointly but you are divorced. Does this mean you filed jointly in the past but now both of you are filing single. Also, are we talking about the same rental property you have reported in the past filing Married filing Jointly but need to report on your own separate returns?
Also, we need clarification to your statement that the property was sold to me to my ex. Who owns the property? This makes a big difference in determining what your depreciable basis is.
Let us know more specific details.
You are right, filing jointly but were divorced. filed jointly in the past but now both of you are filing single. Also, we are talking about the same rental property we have reported in the past filing Married filing Jointly but need to report on my own separate returns
it was owned by my ex, its now owned by me because it was sold to me by my ex.
Your basis would be your original half plus what you paid for the other half. Because you purchased from a related party - in IRS terms- you must keep the depreciation of the related party plus your own. Therefore, all depreciation ever taken still counts.
You will enter the property on your return with the new basis, keep the date originally placed in service, correct the depreciation from prior years when the program asks and continue on.
About Publication 544, Sales and Other Dispositions of Assets has all the details.