Rental property depreciation

[Roberto A.]

hello experts,

Unfortunately we didn’t depreciate our rental property for years, can we start this year by putting 0 for all previous years and use the value of the house when originally bought minus the land value?

Thank you

[Steve Vaughan]

I did this on a rental years ago. Didn't take the depreciation because I didn't need the deduction.  After learning the IRS assumes you took all allowable depreciation at sale whether you took it or not, here's what happened..

My cost basis and land value stayed the same as when I bought it.  Same amount to depreciate, just over less years. This one was about $285k. Paid $345, $60 in land per county assessor.

I didn't take depreciation for 7.5 years, so now it's compressed into 20 years instead of 27.5  What was supposed to about $10,360 per year for 27.5 years is now about $14 250 per year for the next 20. Make sense?

Worked out well for me. I earned zilch when I bought it and can better use the deduction these days anyway;)  Hopefully will do the same for you.

I only help answer tax ?s when the experts are busy. Hopefully one will have time to give you a straight answer.