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Updated almost 7 years ago,
Depreciation Questions in TurboTax
Hi everyone, first time posting here. I could use your help with the following two questions -
How do I enter depreciation on my taxes if my property was used as a rental, then my personal residence, then rented out again in the 2017 tax year? I am using TurboTax.
Do I:
- refer to the original depreciation schedule and pick up at the level of depreciation that correctly accounts for the years it was a personal residence (even though I didn't claim depreciation in those years)?
- refer to the original depreciation schedule but "pause it" so that I pick up depreciaiton as if no years had passed in between rental use (this doesn't sound correct, but it's an opinion I've come across in my research)
- start fresh and ignore the previous depreciation schedule, picking the lesser of an adjusted basis (original home purchase value minus land value + improvements) or fair market value minus land value
I have spent several hours looking at IRS publications and searching forums with mixed or no advice. Hoping the pros on here can share the facts, and also cite their source in light of a potential audit.
Finally, just a TurboTax question - what is it referring to when it asks me to list any "nondeductible expenses from prior years - operating/depreciation/AMToperating/AMTdepreciation"? Is this a way to put down the depreciation gap that I could have claimed if I hadn't converted the property to personal use in between rental years?
Thank you!
Joel