Amend Return or Utilize Carry Forward

[Nick C.]

Hope I can explain this well enough. Background....I invested in two DST's in Jan of 2022. When I received my 2023 taxes back from my tax preparer, I noticed that they included income from the DST's but did not include any depreciation. I then went back and reviewed my 2022 taxes and they were the same (included income but left out depreciation). I had given them the cost segregation studies for both properties that were provided to me but they didn't use them. When I brought this up, they said they could amend my taxes. I picked them up yesterday and they amended 2023 but not 2022. When I asked why, I think I understood them to say they included the depreciation for both years on 2023 and there is a carry forward of losses ($13k).

Is this the right way or best way to do this? My concern is at some point the DST's will go full cycle and I'll continue to have carry forward losses that I won't be able to use depending on the decisions I make at that time. My other concern is that I'd rather have them amend 2022 as well and have the money now. The amended 2023 taxes resulted in a refund of $7k.

Appreciate any insight on this.

[Bruce D. Kowal]

Your CPA's took a "short cut"  They included the 2022 depreciation along with the 2023.  So you can't go back and take the 2022 depreciation again.  In other words, if the annual depreciation were $10,000, they amended the return by reporting $20,000 of depreciation for 2023.  You have your refund of $7k.  

As for the Cost Seg studies, did you really give those to your CPA's in advance of the 2022 tax returns?  Did you make them aware of the nature of those studies?

I don't know how anyone can prepare a real estate tax return without some consideration give to the actual cost of the structures themselves. What kind of dox did you give? A full rental P&L such as seen on Schedule E? DST's are complicated. What was reported to you? Are you one of several investors?

How to report Delaware Statutory Trust Income

You know what?  Leave it alone.  And next year, make sure you and CPA"s and the administrator of the Trust are all on the same page.