Prior year depreciation on rental property

Forum|Forum|1 year ago
March 22, 2025
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How do I input prior year accumulated depreciation I took on a rental property that was taken out of service years ago and is not put back into service as a rental property. I know the accumulated depreciation amount to add it just doesn't seem to like that I input it at on the asset worksheet page as it's showing that page in red ("not done"). It looks like maybe I should put it in the asset life history but can't seem to find that input anywhere.

AmeliesUncle

Am I correct in assuming you mean the rental is "now" (your original post says "not") put back into service?

If so, you restart depreciation using the current/new placed in service date. For the Basis, you enter the LOWER of (a) Adjusted Basis (usually purchase price, plus improvements, minus depreciation) or (b) the Fair Market Value on the date of conversion. In most cases, it will be the Adjusted Basis.

The Adjusted Basis is decreased by your prior depreciation. You don't enter "prior depreciation" into the program.

At whatever point you sell the property, you will need to know both the depreciation from the first rental period and also from the second rental period. The reporting of the sale can be a bit tricky, but you don't need to think about that now.