Can I reclaim missed depreciation on my rental property after it is sold?

Forum|Forum|3 years ago
April 19, 2023
1 reply
0 views

Hello,

We just sold our rental property in March 2023 and we realized that we haven't been depreciating the property since the time we rented it out in 2017. I have a few questions and I hope your can help. Many thanks in advance.

1. Is it okay to reclaim the missed depreciation using form 3115 in our situation? If so, must we submit the form in 2023?

2. We are late in filing federal tax return for this year but expecting to file it in the next a couple of days. Shall we use the form 3115 to reclaim depreciation from 2017 to 2022 (without claiming depreciation in our regular 2022 federal tax return), or use the 3115 form to reclaim depreciation from 2017 to 2021 and claim 2022 depreciation in our regular 2022 federal tax return?

3. Does a rental property normally get depreciated in the year in which it is sold? We owned the property for a few months in 2023 before it was sold.

BR,

TurboTax Home & Biz Windows

Best answer by AmyC

1. Yes, it can be mailed in anytime.

2. File the 3115 for 2017-2021

3. No, all depreciation claimed or allowed is subtracted from the basis when sold.

AmyCAnswer

Employee

1. Yes, it can be mailed in anytime.

2. File the 3115 for 2017-2021

3. No, all depreciation claimed or allowed is subtracted from the basis when sold.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

ioitangAuthor

Hello AmyC,

Thanks for the quick turnaround. I really appreciate it.

Follow up question: Can we snail mail the form 3115 for 2017-2021 and separately e-file our 2022 federal tax return, which is late (without filing extension)? Or they need to be mailed together?

BR,

GeorgeM777

To follow-up on the comments from @AmyC, Form 3115 does not have to be sent with your 2022 return. Therefore, if you prefer, you can snail mail Form 3115 and e-file your 2022 return.

@ioitang

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"