Proper calculation for depreciated cost basis of rental property.

Forum|Forum|7 years ago
August 20, 2018
1 reply
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My tax CPA retired. I am doing my 2017 taxes myself. We have several rental homes. My problem is on my paper work I only show the beginning basis for the properties. Some of the dates on these go back as far as 2012. So how do I get to the current basis to use in 2017.

Carl11_2

Employee

I can help here if (and only if) you have the documents needed. Do you have a complete printout of your 2016 tax return? What you will need from the 2016 return is the IRS Form 4562.

Now there are two IRS Form 4562's for each rental property. Both of them print in landscape format. One is titled "Depreciation & Amortization Report" and the other is titled "Alternative Minimum Tax Depreciation Report."

These documents are an absolute "must have". If you don't have them for your 2016 return, then find the earliest return where you do have them, and that will hopefully give us a starting point.

S

Stinkerbellkity

Employee

In TurboTax, you don't need the current basis. Enter the date placed in service originally and the cost basis at that time. The program will calculate and show you the prior accumulated depreciation taken and will then calculate the current year depreciation just as though you had been using the program all along.

Carl11_2

Employee

Good catch! I missed that. You don't need the "current" basis, because you don't use the "current" basis. You use the original basis, which according to your post, you already have. All you're doing is continuing what your CPA already started. if the basis goes back as far as 2012, then that particular rental was placed in service in 2012, and that's exactly what you will show on your 2017 return.