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Updated over 5 years ago,
How to calculate depreciation the second time around
Hello! I purchased a property as my primary residence in 2006, converted it to an investment property in 2009, and then moved back into it in 2016. If I convert it back into an investment property, how do I calculate the depreciation when I start putting it back on my Schedule E? Do I continue the old/original depreciation schedule or somehow recalculate it? I read one post that suggested that I would need to go back and amend my 2016 taxes to recapture the depreciation at the time I had moved back into the house (!)
I also have a question about capital gains, since we might have to sell the house at some point in the next year or two. The house was under water for most of the years it was a rental, and only started being above water again within a year or so of the time I moved back into it in 2016. Is there some way that I can provide that evidence rather than the capital gains being averaged out on an annual basis from the time that I bought the house originally?
Thanks!