Depreciation Questions in TurboTax

[Joel Schanbacher]

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

[Greg Scott]

Joel:

I hate to see someone struggle like this.   I used to do this myself, so feel your pain.     

Please consider a CPA.  A CPA may seem more expensive, but a good one not only does your taxes but gives you personalized advice.  You will likely find that advice results in a financial benefit vastly exceeding the cost of the tax returns.  Also factor in the value of sleeping well at night and avoiding the constant desire to stab your monitor with a pencil.  It's worth it.